10 biggest mistakes founders make before fundraising ⭐
First-time founders should learn from the mistakes of others. Fundraising is a vital aspect of building a business, and the outcome of the process can have a significant impact on the future of the company.
Avoiding the most significant mistakes before fundraising is crucial to achieving success. Our research reveals there are 10 common mistakes that founders and investors have identified and we break them down for you in this article and give you tips for how to avoid each one.
1. No Fundraising Strategy ⭐
The most common mistake is not having a clear plan or strategy. You need to develop a fundraising roadmap. A fundraising roadmap is a well-defined plan that outlines the steps a company will take to raise capital to achieve its financial goals.
Excel Master is soon releasing a Fundraising Roadmap checklist. Click here for an early subscription. It includes over 100 steps to take for your fundraising journey.
Have you clearly defined your fundraising goals? Have you created an investor profile? Have you developed your fundraising message? Do you have an investor outreach strategy? Do you have a fundraising budget?
If the answer is ‘no’ for any of these then, you are leaving yourself open to wasted time and resources and possible failed pitches.
A fundraising roadmap is different to being investment ready. We have the most comprehensive investment readiness checklist that you will find on the internet. It includes over 300 tasks of what to do before you create your fundraising roadmap. If you’re serious about successfully raising funds, you can get it here.
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2. Improper business plan ⭐
Not having a good business plan is like driving blind. It can also lead to mistakes during fundraising as founders may not have a clear understanding of their target market, which can make it difficult to articulate the value proposition of their product/service to investors. This can lead to investors being hesitant to invest in the company, as they may not be convinced that there is a viable market for the product or service. Additionally, without a clear business model, founders may struggle to identify and communicate how their company will generate revenue, which can also make it difficult to attract investors. Other mistakes that can arise from not having a good business plan include underestimating the amount of capital needed, not having a clear strategy for growth, and failing to identify and mitigate potential risks. You should contact Excel Master who has worked with numerous founders locally and from the diaspora to create thorough business plans. Many members of our team are XNTJ’s, so planning and foresight are innate to us. A business plan conducted by Excel Master will include 10 highly detailed sections:
- Executive Summary: A high-level overview of the business, including its mission, products, target market, and financial projections.
- Company Overview: A detailed explanation of the business structure, ownership, management team, and history.
- Market Analysis: An analysis of the industry, including market size, competition, target market, and trends.
- Product and Service Offerings: A description of the products and services offered, including their unique selling points, production processes, and packaging.
- Marketing and Sales Strategy: A plan for how the business will reach and acquire customers, including advertising, promotions, and sales channels.
- Operations Plan: An explanation of how the business will operate, including the location, equipment, supply chain, and staffing requirements.
- Financial Projections: A projection of the business’s revenue, expenses, and profitability over a period, including detailed assumptions and calculations.
- Funding Requirements: A discussion of the funding required to start and grow the business, including a breakdown of costs and the sources of funding.
- Risk Analysis: A discussion of the risks associated with the business and a plan for mitigating those risks.
- Conclusion: A summary of the key points made in the business plan and a call to action for potential investors or partners.
3. Ignoring a Competitive Analysis ⭐
Entrepreneurs must understand their competitors and the strategies employed in their respective industries. Comprehensive competitive analysis helps investors gauge the potential success of your company.
Ignoring competitive analysis can lead to mistakes for founders when fundraising because they may not have a clear understanding of the competitive landscape and may struggle to differentiate their product or service from others in the market.
This can make it difficult to demonstrate to investors that there is a viable market for the product or service, and can also lead to overestimating the potential market size.
Additionally, without understanding the strengths and weaknesses of competitors, founders may struggle to identify potential risks and opportunities in the market, which can make it difficult to develop a strong business strategy.
Excel Master is soon releasing a Competitive Analysis spreadsheet. Click here for an early subscription. This spreadsheet includes fields to conduct competitive analysis based on:
- Company Size
- Year of Incorporation
- SEO Analytics
- Social Media Comparison
- Product, Pricing and Marketing Strategy Comparison
- Product/Service Feature comparison
- Customer Service Comparison
- Hiring Comparison
- Sales Comparison
- Fundraising Comparison
- and more! Trust me, we went in.
- Subscribe here to know when it’s ready.

4. Improper Pitch Deck and Pitching ⭐
A pitch deck is a crucial tool that enables entrepreneurs to communicate their ideas to investors effectively. A compelling pitch deck helps entrepreneurs make a lasting impression on potential investors.
A good pitch deck typically includes the following slides:
- Introduction
- Problem
- Solution
- Business Model
- Market Opportunity
- Team
- Marketing and Sales Strategy
- Competition
- Financials
- Milestones
- Ask/Call-to-Action
Bonus extras may include:
- Product Demo
- Social Proof/Testimonials
- Exit Strategy
- Risks and Challenges
Making mistakes in your pitch deck can damage your fundraising efforts by making you appear unprofessional and inexperienced, which can turn off potential investors.
If your pitch deck contains errors or inconsistencies, investors may question your attention to detail and ability to execute your business plan.
Ask yourself:
“Would I invest in a company that can’t even get its own pitch deck right?”
Yes, exactly you wouldn’t. So, don’t let an investor make that decision about you.
How you pitch is also important. Making mistakes in your pitch can damage your fundraising efforts in several ways.
Firstly, it can demonstrate a lack of preparation and attention to detail, which can undermine your credibility as a founder. Additionally, mistakes can make you appear nervous, lacking in confidence, or even dishonest, which can erode investor trust.
If you are unable to present a clear and compelling pitch, investors may question whether you are the right person to lead the company. Lastly, mistakes can detract from the content of your pitch and distract investors from the key messages you are trying to convey.
Ask yourself,
“If I can’t deliver a flawless pitch, how can I convince investors that my company is worth investing in?”
Excel Master creates gorgeous pitch decks for all our clients. If you’re interested in receiving a bulletproof deck, please book your consultation here.

5. Over and Under Valuation ⭐
Valuation is an essential aspect of fundraising as it determines the worth of the company. Entrepreneurs must be realistic about company valuation to avoid turning off investors. Over or undervaluation is a huge mistake when fundraising because it can lead to unrealistic expectations and hinder the company’s ability to secure investment.
If a company is overvalued, investors may see the opportunity as too risky or overpriced, while an undervalued company may not attract the necessary funding to achieve its goals.
Overvaluation can also lead to misaligned expectations with investors and hinder future funding rounds. We’ve had clients before that insisted on high valuations and immediately turned-off investors. Also, overvaluing a company can create pressure to meet unrealistic growth targets, which can be damaging to the long-term success of the business.
Ask yourself,
“Is it better to aim high and risk alienating investors, or be conservative and potentially undervalue the company’s worth?”
Here are 5 tips to avoid over and under-valuation:
- Research comparable companies to determine a fair valuation range.
- Consider the company’s current stage of development and potential for growth.
- Avoid unrealistic projections or assumptions about the company’s future performance.
- Seek input from experienced advisors or investors to help determine a fair valuation.
- Be transparent and open about the company’s financials and performance to build investor trust.
Another option is to hire a professional. We don’t play games with our valuation services. We use 5 major valuation methods and give our clients incredibly detailed financial models and a 25-page valuation report that will ‘wow’ investors. If you’re ready to be ‘wowed’, please book your consultation here.
6. Lack of a solid team ⭐
Investors invest in the team as much as they invest in the business. Having the right team with the right skills and dynamics is crucial to securing investment.
Not having the right team can damage your fundraising efforts by raising concerns about your ability to execute on your business plan. Investors may be hesitant to invest in a company that lacks the necessary skills or experience to bring its product or service to market successfully. Additionally, a weak team may indicate a lack of leadership or vision, which can be a red flag for investors. If a company is unable to attract top talent, it may struggle to compete with other startups in the industry.
Ask yourself,
“Do I have the right team in place to execute our vision and attract investment?”
Ensure that you:
- Build a team with a diverse range of skills and experience relevant to the company’s industry.
- Focus on hiring team members who are passionate about the company’s mission and vision.
- Consider bringing on advisors or board members with experience in the industry to provide guidance and credibility.
- Build a positive company culture and offer competitive compensation packages to attract and retain top talent.
- Be transparent about the team’s strengths and weaknesses, and have a plan in place to address any gaps in skills or experience.
One of the metrics we assess companies that attend our free needs assessment or more comprehensive business audits is Talent Analytics. To get your talent analytics score, start the journey here.
7. Not Prepared for Questions ⭐
Being unprepared for questions can damage your fundraising efforts because it can indicate a lack of knowledge or understanding of the business, industry, or market. This can lead to investors losing confidence in the company’s ability to execute its business plan or attract customers.
For example, if a startup is pitching a new mobile app, an investor may ask about the competitive landscape and potential barriers to entry. If the team is unprepared to answer these questions, it could signal to the investor that they have not thoroughly researched the market or competition.
Investors need to feel confident in the startup’s ability to achieve its goals and provide a return on investment. Being unprepared for questions can create doubt and erode investor confidence, ultimately making it more difficult to secure funding.
Ask yourself,
“Am I confident in my ability to answer any question an investor may ask about my business, industry, or market?”
8. Not Understanding Your Investors ⭐
Not understanding your investors can damage your fundraising efforts because it can lead to misaligned expectations and a lack of trust. Investors have different investment strategies, philosophies, and goals, and it’s important to understand their preferences to tailor your pitch and strategy accordingly.
For example, if an investor typically invests in later-stage companies and is looking for a quick return, they may not be interested in a long-term, high-risk investment in an early-stage startup.
To avoid damaging your fundraising efforts, take the time to research and understand potential investors before approaching them.
- What metrics are important to them?
- What is their usual ticket size?
- What is their investment philosophy?
By understanding their preferences and goals, you can better tailor your pitch and strategy to align with their interests.
Investors want to feel like their investment is in good hands and will provide a return. Failing to understand their preferences and goals can lead to a lack of trust and ultimately damage your fundraising efforts.
Ask yourself,
“Do I understand the preferences and goals of my potential investors, and am I tailoring my pitch and strategy accordingly?”
9. Vague or Unreliable Financial Projections ⭐
Vague and incorrect financial projections can damage your fundraising efforts because they can erode investor confidence in your ability to manage finances and deliver on promises. Investors want to see a clear and realistic financial plan that demonstrates a pathway to profitability and growth.
For example, if a startup presents projections that are overly optimistic or lack detail, it may raise red flags for investors and make them question the credibility of the founders.
To avoid damaging your fundraising efforts, make sure your financial projections are realistic, detailed, and supported by data. It’s better to be conservative and under-promise than to over-promise and under-deliver.
Investors want to see a clear plan for how their investment will be used and what returns they can expect. Failing to provide accurate and detailed financial projections can lead to a lack of trust and ultimately damage your fundraising efforts.
Ask yourself,
“Are my financial projections realistic, supported by data, and clearly communicated to investors?”
You know where to come to if you need expert assistance.

10. Neglecting Due Diligence and Poor Negotiation Skills ⭐
Investors typically conduct comprehensive due diligence before making an investment decision. Entrepreneurs must present relevant information to investors and have competent negotiators to secure a deal. Neglecting due diligence can damage your fundraising efforts because it can lead to surprises and discrepancies in your company’s financial and legal history that may cause investors to lose trust and confidence in your business.
For example, if a startup fails to disclose past legal issues or financial struggles, it may create mistrust among potential investors.
To avoid damaging your fundraising efforts, ensure that you have all of your financial and legal documents in order and ready to be reviewed by potential investors. Be transparent about any past issues or challenges and provide context and solutions to address them. Investors want to feel confident that they are investing in a sound and ethical company.
Ask yourself,
“Have I conducted a thorough review of my financial and legal history, and am I prepared to be transparent and address any issues that may arise during due diligence?”
Improper negotiation skills can damage your fundraising efforts by creating tension and mistrust between you and potential investors. For example, if a founder comes across as too aggressive or confrontational, it may turn off investors and lead them to question the viability of the startup.
To avoid damaging your fundraising efforts, it’s important to approach negotiations with a clear understanding of what you want to achieve and how you can best communicate your value proposition to potential investors. Take the time to prepare your pitch and anticipate questions or concerns that may arise.
Ask yourself,
“Have I prepared and practised my pitch, and am I confident in my ability to negotiate effectively and convey the value of my startup?”
In conclusion, avoiding the common mistakes discussed in this context is critical to fundraising success. Taking the appropriate steps to avoid these mistakes can increase the chances of securing funding for your business. Seeking the guidance of investment readiness consultants, venture capitalists, angel investors and legal counsel can provide you with valuable advice and insights into the fundraising process. It is important to keep in mind that there are alternative forms of fundraising, such as crowdfunding and bootstrapping, that can be considered.
Furthermore, it is important to conduct thorough research on your target investors to understand their priorities and values. This will enable you to tailor your pitch to their specific needs and interests, increasing the likelihood of a successful fundraising round. Additionally, building a strong and capable team is essential to instilling confidence in investors and demonstrating your ability to execute your plans. Lastly, being transparent and honest in your financial projections is crucial to building trust with potential investors.
Overall, fundraising can be a challenging and complex process, but with careful planning, attention to detail, and the right support, it is possible to secure the funding you need to bring your vision to life.
Top 10 Takeaways ⭐
- Not having a fundraising plan is a cardinal sin.
- Having a well-structured pitch deck is crucial to securing investment
- Investors invest in the team as much as they do in the business
- Being realistic about company valuation is necessary
- Thoroughly researching the target market is vital
- The importance of an effective competitive analysis should not be underestimated
- A sound business model is essential to secure investment
- Financial projections should be reliable and credible
- Effective branding and networking improve investor interest
- Due diligence is critical to investors; entrepreneurs must have competent negotiators to secure the deal.