Some management consultant buddies of mine have a game they play at the bar: Whoever uses the phrase "core competency" at any point gets stuck with the tab.
Apparently, that phrase is pretty played out when it comes to advising Fortune 500 companies. My friends claim it is used when a consultant really doesn't have anything else to say.
Their game got me thinking about the things I hear regularly that are red flags in entrepreneurial and venture-capital speak. The phrases below, with their associated translations, are usually signs that an entrepreneur is using buzzwords in an effort to hide potentially shallow claims.
If I can read between the lines, so can your prospective funder. When explaining your business to an investor, it is better to be upfront about the challenges you are facing than to try to hide them behind jargon.
Instead of suggesting a valuation that may completely sink an investor pitch, try a candid statement, such as: "This is the amount of equity we need to retain after investment to keep my team motivated." It gets the valuation discussion rolling while acknowledging the obvious: that the process is imprecise.
Similarly, instead of listing an enormous team of folks who are not on your payroll, say, "I've come a long way with just a laptop and some freelance help." It shows that you are hardworking, hungry and ready to grow.
Investors don't expect entrepreneurs to have all the answers, but they do expect them to be honest. Part of a good pitch is telling your story, and that story should not be fictionalized. Better to stick to the straightforward talk and leave the flowery language to the poets.