The other aspect which founders get carried away is presentation, where in they prepare presentation on what is problem and what’s there solution to the problem and start building presentation.
They showcase the market opportunity where in the numbers are always in millions and billions and founders will show case the numbers they will achieve in quarter 1 and quarter2 and so on.
This approach is also theoretical as founder just puts his thought process where in he has not looked at valuation, what’s the burn rate where the funds will be utilized and what benefit will it have on the revenues, what is cost of acquiring customer and equity dilution these will be left out completely.
In the presentation the founder focuses on approach to make it look beautiful and spending time on aesthetics of the presentation even including changing fonts size and fonts type take up time.
Preparing huge file of presentation which cannot be easily mailed and easily downloaded by investors when sent on mail also ensures that founders mail reaches spam box and investors who get lots of mail does not look at it.
Presentations should be used but with content driven and supported by financials rather than just preparing fancy presentation which says how you will capture the market and what’s your strategy with out having clarity on how much money is required to implement the strategy.
Its not only mistake of founders but also some amateur investors who call themselves as investors also follow the old style and ask the founders on how would you go about answering how is your business different from the other competitors in the market.
So the founders present saying how they are different by showing the SWOT analysis or competitor analysis which has no relevance to ground reality