The pitch for a startup, together with the business plan, is one of the fundamental elements to present oneself in the best possible way and convince investors.
But let’s first try to understand what a pitch is and what are its main characteristics?
What is a startup pitch?
The startup pitch is nothing more than a few-minute presentation in which the startup team must try to convince potential investors, business angels, venture capitalists or other interested parties and thus raise capital.
The structure of a startup pitch
An effective and successful startup pitch follows a rather complex structure with very specific characteristics that we can see summarized below.
Problem & Solution
When you present your startup to a possible investor, it is good that he immediately understands that your idea is not only innovative but really solves a market problem, a lack that makes your product / service extremely interesting.
In the pitch of a startup it is essential to clearly highlight the existing market gap and the solution that your team intends to bring, also clearly expressing the mission, vision and value proposition of your company.
2. Market size and competitor
After demonstrating that yours is a valid idea because it responds to a real need of the market, you must then get a quantitative and qualitative idea of the market itself. To do this, it is good to follow a logic that goes from the general to the particular, that is the famous trinomial TAM-SAM-SOM: from the people interested in your product, a variable that includes the overall expenditure of a particular sector, we move on to the part of the market that you actually aim to reach that is the market served up to the penetrated market or the market share served that you expect to obtain.
At this point in the pitch of a startup, a reference to competitors cannot be missing: you cannot think that you are the only one offering that particular product / service, which, however, is not entirely negative because it means that there is a potential market. The important thing is to know your competitors and highlight their key information and results and then highlight the aspects that differentiate you and the distinctive factors.
3. Business model
In this part of the startup pitch it is essential to make investors understand how your business generates value and will therefore guarantee them an adequate economic return in the medium to long term. You must therefore show the logic and channels to produce revenue, demonstrate that your business is scalable and indicate the economic-financial projections of your business over 3-5 years, highlighting the key metrics of your startup.
At this point, introduce your startup team: it is the people who make the difference in the execution of the business idea. The skills and competences of the team members must be differentiated and complementary so as to cover the various company areas. In the startup pitch it is essential that it is clear who is doing what; in this regard, it is useful to insert the photos of the team to give people a face and highlight their roles, experiences and backgrounds. It will be reassuring for potential investors to know that your startup has skilled people and key figures for the type of business in which it intends to operate.
You are at the end of your pitch and it is important that at this point you go to specify the loan request or you must communicate to potential investors what you need to realize your business idea. Highlight the fundamental financial data for your business such as: break even point; turnover level; EBITDA and burn-rate and make your request!
As it will now be clear to you, creating a complete and convincing startup pitch is fundamental. The BizPlace team is ready to support you with all the suggestions also in terms of public speaking and effective communication!
Find out more tips for building a successful pitch deck!
The BizPlace team