In this competitive scenario, attracting investments is an essential step for business success. In April 2024, Brazil stood out significantly, representing 48,6% of the total invested in Latin America. This month, Brazilian startups raised US$ 356,7 million in 73 rounds of investment, as indicated by the monthly report released by the Distrito platform
However, many entrepreneurs, especially beginners, they make mistakes that can jeopardize their chances of obtaining the necessary funding
Thinking about it,André Medina, Innovation Superintendent of Andrade Gutierrez,pioneering in innovation in the engineering and construction sector, listed five common mistakes that startups make when seeking new investments
1- Lack of adequate preparation
One of the most common mistakes is the lack of preparation. Many entrepreneurs underestimate the need to be well prepared before presenting to potential investors. This includes having a well-crafted pitch deck, a detailed business plan and realistic financial projections.
Investors want to see that the startup has a clear vision and a well-defined path to success. Therefore, an inadequate preparation conveys a lack of professionalism and can drive away investors, оцінить експерт
2- Unrealistic assessment of the company
Another common mistake is the unrealistic assessment of the company's value. Startups often overestimate their value, what can deter investors who consider the valuation disproportionate in relation to the stage of development and the achievements of the company. An excessively high valuation can be seen as a lack of understanding of the market and investor expectations. It is crucial to base the assessment on concrete data and industry benchmarks
3- Lack of knowledge about the investor's profile
For André Medina, seeking investment without knowing the profile and preferences of investors can be a shot in the foot. Not all investors are suitable for all startups. It is essential to research and identify investors who have interest and experience in the sector in which the startup operates, comment
Presenting to investors who have no affinity for the business can result in wasted time and opportunities. Understanding what investors are looking for and adapting the approach is essential for success in fundraising
4- Excessive focus on the product and little on market needs
Many entrepreneurs become so enamored with their products that they neglect the needs and demands of the market. Investors seek startups that solve real problems and have a well-defined target market. It is essential to demonstrate that there is a significant demand and that the proposed solution effectively meets the needs of the target audience
5- Lack of transparency and honesty
Transparency and honesty are essential characteristics for establishing a relationship of trust with investors. Hiding information or presenting data misleadingly can have serious consequences.
Experienced investors can identify inconsistencies and, once detected, the credibility of the startup is seriously compromised. Be honest about the challenges, risks and the needs of the company create a foundation of trust and can, paradoxically, increase the chances of receiving the investment, finalizes the executive
