Pitching to Hard-Hitting Investors

Revenue

• What are your five-year revenue projections? You might wonder who would be able to predict one-year revenue let alone five-year, but venture capitals want to know that the revenue will be large enough for the business to go public or be bought by another private investor.
• What does your 24-month cash flow statement look like? The investors make a mental note of how much money you believe it will take to get to profitability and match that with your funding request.
• What are the margins? You better say pretax margins will be 25% or more, or the ejector button will be pushed.

Marketing

• What is the market positioning for your product or service? Essentially, is the product being sold for a premium or at a low price to build volume? Premium is the better of the two choices, because higher margins mean greater profits and more room to cover for mistakes in sales, marketing or market-timing.
• How will your product or service be marketed? The investors want to know whether it would take Bill Gates money to launch and build marketing momentum or just some great PR and word of mouth. You can guess their preference.

Selling

• How will it be sold? The investors want to know if you will have to spend a tractor-trailer load of money to build and train a team of Navy Seal-type sellers, or if you can you leverage partnerships and distributors to keep costs low and move quickly into the market.

Competition

• Who are your competitors? Investors want to know if there are a few King Kongs lurking in the jungle or just bunch of retiring mom and pops who don't realize what a great opportunity they are sitting on.
• What is your competitive advantage? Products that are patentable and proprietary are similar to thick walls in a fortress. The stronger the patents, the easier it is to keep the invaders out. At minimum, if the business fails, the investors can get back some of their money by selling of a patent. If you have Jack Welch as your president and CEO, that would count as competitive advantage as well.