Most rejected decks don’t fail on the business. They fail on the number. Institutional investors decide quickly whether a valuation is defensible, and these five mistakes usually settle it.
1. Anchoring on your last round
Founders often justify the next valuation by pointing to the previous one. Investors price on current performance and forward cash flows. Fix: build the valuation from today’s revenue, margins and growth, and show the step-up from the last round in terms of what has changed in the business.
2. Picking comparables that flatter you
A peer set made of listed outliers or global leaders is easy to spot. Fix: choose 5–8 comparables with a similar size, growth profile and business model, state why each was chosen, and show the full range, not just the top end.
3. A hockey-stick forecast with no drivers
Projections that jump in year two without a clear reason lose credibility. Fix: tie every growth assumption to a driver such as customers, pricing, capacity or channel, and include a base case, an upside case and a downside case.
4. Ignoring the cap table and the structure
A strong headline valuation can be undone by a cluttered cap table, unclear ESOP planning or unresolved prior investor rights. Fix: present a clean pro-forma cap table, show dilution at the proposed raise, and flag existing preferences and rights up front.
5. Using one method and calling it done
A single DCF or a single multiple invites challenge. Fix: triangulate with at least two methods, such as DCF and comparable multiples, and explain the gap between them.
Before you send the deck
- Can every number be traced to an assumption someone can defend?
- Is the cap table consistent with the valuation and the proposed round?
- Would the downside case still make sense to an investor?
Equity360’s Valuation & Financial Models team builds investor-grade valuations, models and pitch decks. Talk to us before you go to market →
