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Entrepreneurial Advice: Don’t Oversell, It May Cost You a Deal

Sometimes when meeting with an investor, entrepreneurs want to paint the most optimistic picture for their company’s future. Be wary of overselling your business, to the point where you lose credibility. In this season’s Family Special, we saw two brothers pitch their popcorn business to the Dragons. Joe Mimran was impressed by not only the taste of the product but also how well the company had done within one year — so he offered a deal. However, the brothers continued to sell their products to the other Dragons and Joe’s patience almost ran out.

Here are a few tips to consider before your next pitch meeting:

Show, don’t tell

Use data, research and results to explain and verify your claims.

Be conservative with your predictions

Some people think it’s a good idea to be generous with financial forecasts, painting an optimistic future for the company. In reality, it’s more effective to estimate results and then over perform, rather than make big forecasts and under deliver.

Save the hype for your marketing campaign

Buzz words and hype tends to be pretty effective on consumers, but future investors only want the facts.

Important information only

Especially important with your initial pitch meeting, don’t overshare. An investor (usually) doesn’t need to know the process behind how you came up with your colour scheme in your advertisements, or the square footage of your workspace — save those details for due diligence. What are the most important things to know about your business? Be sure to identify and focus on those. Oversharing of irrelevant data can cause an investor to lose interest.

In a situation like Dragons’ Den, when an investor shows interest early on, it’s a great indication they believe in you. Another danger with overselling is continuing to pitch to the less interested Dragons. While it’s at your discretion to continue or accept the deal on the table, you risk losing someone who shares your passion for the business.

Joe Mimran tells pitchers on Dragons' Den to be careful

Watch more entrepreneurial advice from the Dragons»

Video: Joe Mimran explains why you don't want to oversell your product when pitching to investors.