Home Money 3 Key Essentials When Pitching A Business Idea

3 Key Essentials When Pitching A Business Idea

One of the reasons most people give for not pursuing entrepreneurship is lack of capital. With fluctuating economic conditions, banks may not be willing to lend-especially to start-ups. Entrepreneurs can still land successful investment deals from angel investors or venture capitalists. Angel investors are different from venture capitalists in the sense that angel investors provide a one-off investment especially to start-ups in order to help them jump start the business and may include family members and friends. On the other hand, venture capitalists invest from a pool of resources and may involve a whole firm rather than an individual who provide multimillion deals as opposed to seed funding for a start-up.
There are several key factors to keep in mind when delivering and presenting a pitch. Investors are looking to leverage opportunities just like you are and therefore are keen to channel their money where there is fertile ground for growth. For this reason, investors have a third eye and are looking for the following elements in your pitch.

1. Tell us who you are and what you do
Introduce yourself and your team while highlighting the direct role of each member. Briefly highlight their core competencies which display their passion towards growing the vision of the business. This is because investors are human beings who also invest in people. Apart from financial investment, investors also acknowledge the empowering effect of social capital.

2. What problem does your business solve?
Highlight the problem you identified then proceed to highlight how your business addresses that problem. Businesses that provide solutions last long. This element also ought to include the benefits the potential investor will accrue if they invest in your business. It is more or less a question of ‘what is in for them?’ Investors are looking to get value for their money, whether in interest or a certain percentage of stakes in your company. In exchange for what you are asking for, what value are you giving? To get an idea of how to shape this idea, do a background check of what the investor cares about, their current endeavors and projects. Chances are that if your pitch fits the bill, then you could be on your way to making a deal.
3. What are your revenue streams/projections?
Is it from direct sales of your products and services? Is it from a franchise? Include key metrics such as annual turnover and net worth of the business. What are your financial projections and what basis have you used to come up with those projections? Revenue projections need to come from a realistic point of view. Entrepreneurship is not a fairy tale and as such do not sugarcoat your pitch by laying out only the bright side of your business. Inform the investor about the risks involved in your business. One way to capture the attention of a potential investor is to demonstrate any competitive advantage the business has over other players in the same industry.

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