It’s a bit like having good sex: If you know what you’re doing and take it easy, everything is likelier to work out. Of course, if you don’t then it probably won’t, which is the main reason why so many startup entrepreneurs screw up.
None of this is brain surgery — further mixing my analogies — and It’s mostly common sense. Here are some examples of being smart and, in its absence, being kind of dumb.
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Keep It Simple Stupid (KISS)
It’s a cliché, but true. Most active investors read through scores of pitches every week and don’t have the time or memory to understand anything more than broad brushstrokes and big ideas. As leading investor Dave McClure has said, keep your pitch to "idea, traction, market size." All investors really care about is an easy-to-grasp overview of what you’re doing, the rate at which people are buying into it, and how many more people can buy into it. Leave the large business plans at home.
What Counts to Investors
Yes, investors care about your great idea, but they also care about Internal Rate of Return (IRR). This is the rate of return as a percentage of total investment. Investors also raise capital, and their funders (Limited Partners) use IRR to decide who to invest in. If your business has potential to create a large multiple for investors, they'll be more likely to pay attention. Your life-changing idea might be secondary.