Ask The Expert

How do I make a great business pitch to potential venture capital investors?

Our Advisory Board member, Founder/Managing Director of Sankore Investments and venture capitalist, Mrs. Titi Odunfa Adeoye, answers this week’s question:

It is important for an entrepreneur to be specific about the unique value propositions of his product when speaking to potential investors.

An entrepreneur’s pitch is one of the most important pieces in landing or securing the investment. The perfect pitch to a venture capital investor should capture the following fundamentals:

Opportunity 

Investors are keen on the market opportunity or problem highlighted and how your business would address or proffer solution(s) to the problem faced by your target market. Focus on the prospective target market and highlight meaningful metrics that will show the existing customer base and prove momentum by showcasing anecdotes of people who have tried and tested the same or related products and rate them successful. This should cover between two and three slides for clarity and properly convey the nature of the opportunity.

Product/Solution (Demo of Product)

Having laid out the problems faced by your target market, fully discuss your product (high level) – product differentiation, market demand for your product. Show the physical product if available, i.e., let them experience it firsthand.

Business Strategy

The next line of action is a high-level breakdown of your business model and modalities for your product deployment. At this phase, a clear demonstration should be made on how to roll out your product and penetrate your target market/market demand.

Financials/Projections

You should be firm and confident in your numbers; show potential profits, market size, non-financial benefits. Statistics are extremely important during a pitch. It is important to use percentages to explain success potential and the importance of the business idea by showing possible outcomes of the solution to the problem the business is trying to solve or the expected financial return within a financial horizon.

Team

Investors always want to know the caliber of the team in which they are investing – background, work experience if any. Highlight the team’s strengths and their commitment to delivering on the product.

Passion

No one will invest in a dull business owner. Let your personality represent your product and service. Show the roadmap to success and where their funding fits in (i.e. what it will be used for) and provide a possible exit opportunity for investors if available

While a business plan is important, it is worth noting that venture capitalists may be swayed by passion, an impressionable personality, knowledge displayed by the entrepreneur as well as an engaging pitch. It is imperative that business owners equally know their numbers and can connect with prospective investors on a personal and professional level.
 
Below is a summary checklist of necessary items for a successful pitch:
  • Introduction – Who you are/ What you can do
  • Problem statement – Existing problem and opportunity 
  • Value proposition – Solution to problem statement
  • Demo of product – Sample of product
  • Market analysis – Customers/users, competition
  • Business model – Business cycle and mode of operation
  • Financial analysis – Revenue, break-even, expenses
  • Funding and milestones – Intended use of funds
  • The team – Members of your team