Most startup founders struggle to clearly define their problem statement, as seen and heard from over 2,000 pitches in the last year. A well-defined problem statement is crucial as it captures an investor’s attention and sets the tone for the pitch, providing an understanding of the market size, need for the solution, and who the users are.

In this blog post, we’ll discuss the common pitfalls of crafting a problem statement and what investors look for in one, particularly for B2B and deep tech startups.

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Common pitfalls

One common pitfall is focusing on the solution rather than the problem itself. Startups often fall in love with their product instead of the problem, which can hinder growth and product-market fit.

Another mistake is trying to solve multiple problems at once. It’s important to focus on solving one problem at a time, especially at the seed stage.

Buzzwords should be avoided in the problem statement, as they often relate to the solution rather than the problem itself.

Creating a problem that doesn’t actually exist or isn’t critical is another pitfall. The problem should be a pressing need or pain point for the target stakeholders.

It’s also essential to keep the problem statement concise, with a focus on identifying the biggest pain points and the primary stakeholder for the solution.

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Once the problem statement is defined, it’s important to ensure that the problem is significant and necessary, keeping directors and executives up at night and leading to discussions in board meetings.

With a good problem statement, investors can understand the opportunity the problem presents and how they can help accelerate the company’s growth.

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This article was first published on November 19, 2020

The post How to craft a problem statement that VCs will love appeared first on e27.