Having a brilliant business idea isn’t enough to guarantee success in the tech industry; you need funding. However, securing that funding isn’t easy. That’s where learning how to pitch your business to potential investors comes in. But how do you pitch effectively when you’re unsure where to start or the right steps to take?
In this article, we’ll share six of the top tips on how to pitch your business and cover other success strategies including the different types of pitches, writing an effective pitch, and all the essential details to include.
We’ll also cover common mistakes to avoid when pitching your business idea and strategies to safeguard it.
Let’s get started!
A business pitch is a succinct presentation of a business idea, product, or service to convince people to support and fund it.
Your pitch is what gets investors to pay attention to your business.
Imagine you have only 30 seconds to captivate a potential investor with your business idea. What would you say to convince them to buy into your vision? This is what makes a business pitch important.
Sometimes, it could also be used to get continued support and funding, not only when presenting an idea.
You can pitch your business idea and get funding from:
However, this article's main focus would be on showing you how to pitch your business idea to venture capitalists.
According to the 2022 Venture Capital in Africa Report (AVCA), West Africa saw the largest proportion of venture capital deal volume across the African continent, capturing 30% of the market. Nigeria stood out as the most active country in terms of volume, contributing 22% to the total.
Every entrepreneur will have to make a pitch at some point. The type of pitch you sell will depend on the audience, purpose, method of delivery, and goals.
This is a summary of your business idea that you can convey in the time it takes for an elevator ride.
This pitch lasts three to ten minutes. You summarise the important parts of your idea in a way that grabs the investors’ attention. Here, you’ll provide market and competitive analysis, your financial projections, and how you intend to market the business.
This pitch requires a longer period and a more comprehensive presentation than the other two. If you get this opportunity, ensure you have a blueprint for testing product-market fit and initial results, a monetisation plan, and an exit strategy.
In summary, understanding the three major types of pitches — the elevator, short, and long pitches — will help you effectively pitch your business idea across several contexts and keep your audience interested.
Crafting a perfect pitch requires planning and effective communication. Here are the top six tips on how to pitch your business idea to venture capitalists:
Learn these six tips to secure investment and succeed.
Before pitching your business, carry out your due diligence on the investors by researching who they are, the industries they invest in, the due process they follow, and their track record.
Just as you would want them to know more about you and your business, you should also know more about them so it will be easier to connect and respond to basic questions and possible objections correctly. The more you know about your potential investors, the better your chance of success.
Think back to those stories you were told as a child and how deeply you connected with them. If asked, you might be able to tell the story exactly how you were told then.
That's how you should connect with the investors — by telling them the story behind your business idea, which helps boost their interest. Using a compelling story humanises your pitch. Make use of personal stories or case studies to illustrate the problem your business solves.
Bill Gurley, a general partner at Benchmark stated, “Investors are not solely evaluating your company's story; they are also evaluating your ability to convey that story.”
As you pitch your business, clearly state the problem it addresses. Provide real-life examples to show the urgency of a solution.
When you identify a problem, you're expected to propose a possible solution. What competitive advantage would your solution provide in the market? Is it really what people need? This should be your emphasis.
No information should be left out. 99% of venture capitalists expect the following details in your pitch deck. (aka, the presentation of your idea);
Who you are (executive summary): What's your unique value proposition? What differentiates you from the competition? What's the story behind the idea? What do you intend to achieve? What's your business plan?
Your target audience: Who do you intend to reach? Why them? How do you identify them?
The problem and solution: What pain points are your target audience experiencing? What are the emotional costs involved? What's missing in the current solution, if any? How do you intend to fill the gap? Is your solution worth it?
Financial projections and milestones: How much funding do you need? Why do you need funding now? What milestones or benchmarks have you achieved? What are your numbers? How are you going to make money?
Business concept and model: What is your business model? How can you provide better delivery with more money? How are you going to scale your business?
Competition: Who are your competitors? What differentiates you from them? What similarities do you have? What's the landscape like?
Market opportunity/ market potential: What need can you harness as an opportunity that is absent in the market? What are the reviews of your competitors’ products? Can you fill in the gap?
Marketing and sales strategy: What's your campaign strategy? How do you intend to attract potential customers? Do you have a sales process and funnel in place?
Team: Who would be working with you? Why are they the only ones for the job?
With this, you will be able to anticipate the questions investors may ask and establish credibility and trust.
You can design a pitch deck using Canva, Google Slides, pitch.com, and PowerPoint. Whichever tool you decide to use, your goal should be to remain clear, engaging, and concise
Your exit strategy is the plan for the eventual sale or dissolution of your business. It allows you to reduce or sell your share of the business to minimise losses if the business fails or gain profit if it succeeds. It can also help with financial forecasting and decision-making by providing insights into potential outcomes and the best course of action based on those predictions.
The exit strategy you choose depends on the level of control you want to retain in the business and whether or not you'd like changes to be made once you've acquired your stake.
Learning these six tips will help you secure investment and succeed.
While preparing your entire pitch, be mindful of common pitfalls that can undermine its effectiveness:
It takes preparation to stand a better chance of selling your pitch and winning over investors.
Oftentimes, when we’re so excited about an idea, we tend to forget what needs to be done and waste so much time on the joy of having an idea we believe in. Investors don't just care about your belief in the idea; they want assurance that their money will be well-placed and yield maximum returns.
According to the GITNUX Marketdata report 2024 on self-confidence, people with low self-confidence earn, on average, $8000 less per year than people with high self-confidence, and 70% of people attribute part of their career success to self-confidence.
Your level of confidence will determine how much your audience trusts what you say. If confidence is all it takes to nail the pitch, why not go for it with all you've got?
Not being clear about your goals, funding needs, and how you intend to run the business will cost you time and money.
Be clear about who you are, your target market, your competition, and how your product or service differentiates you. Be specific about:
You can use examples or visual aids to enhance clarity.
Venture capitalists want to know every detail so they have a glimpse of what to expect in the future.
As you deliver your initial pitch, objections will surely arise. Prepare for them. Address the concerns or issues that come up as you pitch your business idea. Rather than disagreeing with or justifying everything they say that is wrong about your idea, try to see their perspective and reason with them.
Also, don’t withhold information on the possible deficiencies you’ve observed in your product or service. They may have already figured it out and are expecting you to say it. When you don’t, you leave a bad impression.
Protecting your intellectual property is important when pitching your business. Here are some strategies to safeguard your ideas:
It’s not just everyone that you should pitch your business idea. Get to know your potential investors better. Do they have a proven track record? If so, what do they seek in business owners or startups? Only work with those who have a good reputation.
Disclose information on a need-to-know basis, focusing on essential details that are relevant to the discussion. Avoid sharing trade secrets or sensitive data unless necessary.
Maintain detailed records of meetings, presentations, and communications related to your business pitch. You can create a document folder where you upload all the files and also have a physical folder for paperwork.
Keeping paper trails helps you access documents easily when needed.
NDAs outline the terms and conditions for handling confidential information. By signing a non-disclosure agreement (NDA), you have the legal right to take action against investors or buyers who use your idea without your consent.
However, ensure you exercise discretion, as some circumstances do not require using NDA.
When you register an idea as a trademark, you notify the public that it is yours. As a result, the law grants you and no one else the authority to use the mark in connection with any products or services described in the application.
In summary, avoiding these common pitfalls and implementing strategies to safeguard your intellectual property can enhance the effectiveness of your pitch, build investor confidence, and protect your business idea.
A perfect business pitch is important to secure funding and push your business to success. By understanding the nuances of effective pitching, how to avoid common mistakes, and how to safeguard your idea during a pitch, you’ll be able to win over investors and hasten the growth of your business venture.
Are you ready to pitch your business to investors, especially venture capitalists? Learn more about securing funding for your business with FFA.
