A business pitch for investment is often one of the more important tasks for founders. Founders spend a lot of quality time on fundraising and chasing investment dollars.
Most investors secure investment funds from high-network individuals and institutions, promising them a high return on the capital deployed. The majority of the investors that you see in the market are intermediaries representing fund houses. Their mandate is to secure projects with minimum risk and high returns. The investor is in the business of making money.
A business pitch should, therefore, provide evidence that the project idea is tested and has the potential to yield great returns. The project does not be immediately in the black. What is important is the evidence of the promise of returns. I do not subscribe to the camp that you can attract investor interest by dressing up the balance sheet. Even if an investor may fall for it, most investors hire an analyst to undertake due diligence on the asset. It will not be long before the real numbers emerge. The deal will not go through, and funding will not be done.
A pitch for investment should provide information on the nature of your project, competition, and prospects for growth. Kindly focus on evidence and analysis that will explain why your project is low risk. Before rushing to create an investment pitch, the concept should have been thoroughly tested for risk, return, and longevity of return. Risk analysis should include business, social, political, and economic risks. A business pitch must include a detailed analysis of competitors and the market. It should answer the question of the size of the market, the nature of competition, and why your venture will do well despite it. Get into as much detail as possible.
A key component of a business pitch is profiling the customer. Your customers should be segmented into sub-segments and profiled on basic parameters like age, geography, income, and preferences. This information will strengthen your business case and help convince an investor that the market is large enough and the competition gives your project idea headroom for consistent and sustained growth.
The founders lie at the heart of the business pitch. A business pitch should reflect the founders’ personality, passion for the project, and sincerity and integrity. The founding team is the critical element of a business pitch. Many investment decisions get taken purely on the charisma and passion of investors. Airbnb founders got their first investment without a formal business pitch. The energy, sincerity, and desire to win convinced the investors to work with the founding team.
The business pitch should contain a summary that an investor should be able to quickly browse through and decide if it is a business segment of his interest.