Common Mistakes That May Cause Investors to Walk Away

10, 2021

6 min read

Opinions expressed by Entrepreneur contributors are their own.

You have been working 16 hours a day building a product or service that solves a real problem. As a founder, you can already envision how your startup is going to reshape the . And you are confident that any early-stage investor who picks up a stake in your startup is going to have one of the biggest success stories of his life.

But for some reason, investors don’t seem as excited about your startup as you are. You have reached out to dozens of angel and seed-stage investors. Some have even responded positively. But investors who did express interest offered an unjustifiable lowball valuation. A few high-profile angel investors canceled the deal at the last minute. Why?

The investor’s perspective

Let’s switch sides for a moment and look at the situation from an investor’s perspective to understand what’s happening. 

  • Your start-up is still in its infancy with little or no revenue. 
  • You still haven’t proven your ability to scale a
  • You have to overcome a myriad of challenges in the years to come.
  • And about 90% of start-ups fail.

From an investor’s perspective, the founder is the most important asset a startup has at this stage. It’s the sheer will, acumen and hard work of the founder that turns the idea into a booming business. 

To gauge the founder’s conviction, the investor looks at how strongly he associates himself with the idea; and where, how, and how often he is publicly active.

Related: How Thinking Like an Investor Is the Secret to Launching a Business

What are you doing wrong?

If you shy away from the niche media or if you see expressing your thoughts publicly as a distraction, you are signaling to investors that you’re not 100% serious. Worse, they might assume that you just want to test the waters using their without risk to your reputation.

It’s not that the publicly passive founders are always unprofitable for investors. It’s just that the probability of success is lower with them, at least from the point of an early-stage investor.

Your intentions for the start-up might be all good. But your public passivity is prohibiting investors from getting their hopes high about your startup.

You’re the advocate of the future you are building

When you advocate your idea or business publicly, investors see a founder who has conviction in the business. Such a founder would go the extra mile when the future is uncertain and the roadblocks are many. 

Billionaire recently appeared on the Masters of Scale podcast hosted by LinkedIn co-founder . They discussed Cuban’s investment in Twist It Up, a startup that makes comb for Afro-centric hair. Cuban, along with fellow Shark Tank host invested $225,000 for 25% equity in the startup founded by Noel Durity. 

Hoffman said on the podcast, “They (Cuban and John) weren’t just investing in his product; they were investing in him (Noel Durity).” Not just the sharks, but everyone could see what he had built and how committed he was to building the business. 

Cuban was right to bet on a hungry and hardworking founder with a strong conviction in his business. When the times get tough, most founders give up. Investors know it very well. 

It’s the founders with strong convictions that keep working, keep showing up, keep making just a little more progress. No wonder Twist It Up registered a staggering 40% jump in revenue during the 2020 recession.

Shunning the public because your idea sounds crazy?

If your startup is in a nascent or disruptive sector, your idea may sound crazy to most people. That’s because most people can’t yet see the future you are building. Don’t hesitate to share your crazy ideas, even if you come off as a weird person.

The non-fungible token (NFT) marketplace OpenSea recently raised $23 million in a funding round led by Andreessen Horowitz. 

OpenSea co-founder Davin Finzer has been sharing ideas about NFTs and digital assets everywhere since the launch of the “Amazon of NFTs” in December 2017. He has always been vocal about the evolution of the NFT and crypto landscape, even when his ideas sounded crazy. 

Once you start getting the attention of a few investors, you’ll soon be on the radar of many investors, which would help your startup get a fair and reasonable valuation.

Related: 4 Ways to Generate Investor Interest, Even When Funds Are Scarce

It’s your turn to win over investors

As an early-stage start-up founder looking to raise funds, you would be doing your company a huge favor by engaging with other founders and influencers in your niche. 

Share your ideas on . Write blog posts on your website. Make a list of news publications in your niche, and write articles and opinion pieces for them as an expert contributor. Be a guest on relevant podcasts to discuss noteworthy developments in your sector.

Every time you put something out in the public — on social media, news media, niche forums, or elsewhere — you are indirectly telling investors that you strongly believe in the niche and understand it deeply. You know what you are doing.

His company was barely a year old when he received a rock star-like welcome at a Singapore conference in 2018. I’m talking about Binance founder Changpeng Zhao, who grew Binance into the world’s largest cryptocurrency exchange in just six months of launch. He has built a huge following in the crypto community.

Zhao has never shied away from expressing his views on crypto regulations and the future of decentralized . He has established himself as one of the world’s leading experts that media houses turn to when they want an expert’s opinion on the latest developments. 


Winning the attention and trust of investors is hard. It’s even harder to get them pumped up about your start-up, especially if your idea sounds crazy. Unless they are super pumped, your start-up might not fetch a good valuation. 

Don’t make it even more difficult for investors to build conviction in your start-up. Give them a consistent flow of reasons to believe in you by just being active on social media, news media, niche forums and elsewhere.

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