Pitching is essential for any entrepreneur seeking funding from angels or venture capitalists. Entrepreneurs – as founders passionate about their business – typically know the ins and outs of their business. However, in pitching, they need to think from the perspective of the capital provider, and provide information in a concise yet persuasive way. This is no easy task, and entrepreneurs with great ideas can get passed over because of their inability to communicate ideas.
A pitch, whether written or spoken, has to grab attention and address the need for the company’s solution immediately and with impact. In other words, entrepreneurs cannot simply explain the product or service. They need to explain how it solves a problem, adds value, or makes money. A simple thought process to ensure that the value proposition is clear is to explain why customers will buy the product or service, with purchases/monetisation being, in essence, the most meaningful outcome to a venture capitalist.
Figures and numbers, and more importantly a justification for them, can also show great savviness on the part of the entrepreneur. Venture capitalists will invariably ask about the operating performance of a business. Entrepreneurs need to be prepared to go through this process, and ultimately be able to justify forecasts and valuations.
Entrepreneurs also need to be able to sell themselves well. While there are sheer amounts of businesses with great solutions; very often, what determines which business achieves its goals for expansion and growth is highly dependent on the competence and determination of its founder. venture capitalists want to see both passion and ability from entrepreneurs.
Because of the dynamism of business, venture capitalists also look out for adaptability in entrepreneurs. An entrepreneur who can answer a host of ‘worst-case’ or ‘what-if’ scenario questions, instead of sticking rigidly to his/her business plan, can be seen as having thoroughly and pragmatically thought through his business growth and the potential pitfalls.