Module 8 - Business Entrepreneurship

BUSINESS ENTREPRENEURSHIP
(CUN704)
Module 8
Investors and Your Pitch
2
OVERVIEW
Module Eight will allow students to incorporate the various aspects of a business
plan while developing a successful pitch to sell your idea to potential investors
and/or customers.
With this module we will discuss the last steps needed for completion of your
business plan, along with strategies an entrepreneur can utilize to present the
business plan and make a pitch to investors.
3
EXECUTIVE SUMMARY
The executive summary is written last as it provides a snapshot of the entire
business plan. If someone were to read nothing but the executive summary, they
should have a very good understanding of the business, why the business could
be successful, and how the entrepreneur will operate it in a manner that is
profitable.
Note: The Executive Summary should be no more than one page.
“The executive summary is often considered the most important section of a

business plan. This section briefly tells your reader where your company is,
where you want to take it, and why your business idea will be successful. If you
are seeking financing, the executive summary is also your first opportunity to
grab a potential investor’s interest.”
Source: https://www.sba.gov/writing-business-plan
4
WHAT TO INCLUDE IN YOUR EXECUTIVE SUMMARY
If you are an established business, be sure to include the following
information:
The Mission Statement – This explains what your business is all about. It
should be between several sentences and a paragraph.
Company Information – Include a short statement that covers when your
business was formed, the names of the founders and their roles, your number of
employees, and your business location(s).
Growth Highlights – Include examples of company growth, such as financial or
market highlights (for example, “XYZ Firm increased profit margins and market
share year-over-year since its foundation). Graphs and charts can be helpful in
this section.
Your Products/Services -- Briefly describe the products or services you
provide.
Financial Information – If you are seeking financing, include any information
about your current bank and investors.
Summarize future plans – Explain where you would like to take your business.
5
WHAT TO INCLUDE IN YOUR EXECUTIVE SUMMARY
If You Are a Startup or New Business
If you are just starting a business, you won't have as much information as an
established company. Instead, focus on your experience and background as well
as the decisions that led you to start this particular enterprise.
Demonstrate that you have done thorough market analysis. Include information
about a need or gap in your target market, and how your particular solutions can
fill it. Convince the reader that you can succeed in your target market, then
address your future plans.
Remember, your Executive Summary will be the last thing you write. So the first
section of the business plan that you will tackle is the Company Description
section.
6
EXECUTIVE SUMMARY COMPONENTS
On this slide, along with the next slide, you will learn about the specific
components of the executive summary.
Business concept. Describes the business, its product and the market it will
serve. It should point out just exactly what will be sold, to whom and why the
business will hold a competitive advantage.
Financial features. Highlights the important financial points of the business

including sales, profits, cash flows and return on investment.
Financial requirements. Clearly states the capital needed to start the business
and to expand. It should detail how the capital will be used, and the equity, if
any, that will be provided for funding. If the loan for initial capital will be based
on security instead of equity, you should also specify the source of collateral.
Source: https://www.entrepreneur.com/article/38308
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EXECUTIVE SUMMARY COMPONENTS
Current business position. Furnishes relevant information about the company,
its legal form of operation, when it was formed, the principal owners and key
personnel.
Major achievements. Details any developments within the company that are
essential to the success of the business. Major achievements include items like
patents, prototypes, location of a facility, any crucial contracts that need to be in
place for product development, or results from any test marketing that has been
conducted.
When writing your statement of purpose, don't waste words. If the statement of
purpose is eight pages, nobody's going to read it because it'll be very clear that
the business, no matter what its merits, won't be a good investment because the
principals are indecisive and don't really know what they want. Make it easy for
the reader to realize at first glance both your needs and capabilities.
Source: https://www.entrepreneur.com/article/38308
8
HOW TO FIND INVESTORS
Funding a new business venture is always a challenge for entrepreneurs. One
option is to find traditional financing through a bank and utilizing available credit
on credit cards. However, all of that money has to be repaid and with interest.
Another option is to find investors who are willing to contribute funds for a
future promise to pay with accrued interest. Below are some steps to find
investors.
1) Who are your mentors? Before you start meeting with potential investors,
a great first step is to find industry mentors, both on the operating and investing
side, who can serve as “honest brokers” for you throughout your fundraising
process.
2) What do you want in an investor? As an entrepreneur, you need to ask
yourself if you want an activist investor who will be on calls with you several
times a week and help you make “in the weeds” decisions on issues like pricing,
suppliers and new hires, or if you want passive capital that will write you a check
and only see you four times per year at board meetings.
Source: http://www.forbes.com/sites/ryancaldbeck/2013/05/29/how-to-find-investors/#3e60627d1bb8
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3) How much money are you raising? If you are raising $2 million, your
potential investor-set will be very different than if you are raising $10 million.
Most firms need to put a defined minimum amount of equity capital to work in
each deal, so you don’t want to find yourself raising $2 million but pitching to a
firm who needs to put $10 million to work in a platform deal.
4) Understand the Comps. No matter how unique your company is, there
are comparable companies who have raised capital in your space. Their products
may be different, but there are almost certainly companies that have served
either the same market, need-state or customer-set that you serve.
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5) Get out and Pitch! By this point, you should have a good list of investors
who invest in companies in your industry and life-stage with the same needs
your company presently has. In other words, you should know what companies
have a history of having invested in businesses similar to your own. Once you
have this list together, go out and start pitching a few of the “tier three”
investors on your list—the investors that you would take money from if all else
fails but are not at the top of your consideration set. You will learn how investors
think and what questions they will home in on so you can refine your
presentation for the investors you may later target.
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HOW TO PITCH YOUR BUSINESS TO CUSTOMERS, INVESTORS OR ANYONE ELSE
A great elevator pitch — the 30-second speech that tells someone about your
business in a nutshell — is one of the most important tools an entrepreneur can
have. It's a fast, effective way to grab the attention of someone who might be
able to help you grow your company.
But what do you do once you have someone's attention? Successful sellers and
marketers know that the best sales tactic is to demonstrate the benefits for the
person to whom you're pitching. But the way you execute your pitch will vary
greatly depending on who the recipient is — a potential client isn't going to be
interested in the same things as a venture capitalist.
Source: http://www.businessnewsdaily.com/7774-pitch-business-multiple-audiences.html
12
Pitch to a Customer/Client
Why do people pay for a product or service? In nearly every case, it's to solve a
problem or meet a need that they have. Andrew Ackerman, managing director
of startup accelerator DreamIt Ventures New York, said that the most effective
way to pitch to potential customers is to understand their specific pain point and
focus on it relentlessly.
"If the customer needs a faster solution, don't spend a lot of time talking about
how you are less expensive than the competition," Ackerman said. "It seems
simple, but so many salespeople feel like they have to go through every possible
feature and benefit."
13
Pitch to an Investor
It's a whole lot easier to convince someone to make a one-time purchase from
your company than it is to persuade someone to pour hundreds of thousands —
or even millions — of dollars into your fledgling business. Investors want to
know that you and your team have a solid plan for growth and will give them a
good return on their investment.
"[We look] for founders who have a clearly developed and defined 'why,' 'what'
and 'how' in their pitch," said Boris Wertz, founder of Version One Ventures.
"Each of these is a key component. If you're missing any, it can hurt your pitch
and your chances for funding."
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Pitch to a Media Outlet
If you don't have the budget to hire a public relations firm, you'll need to learn
to pitch reporters that cover your industry. Unlike pitches to the three audiences
mentioned above, a successful media pitch won't directly result in sales or
funding. However, the way a reporter interprets and writes about your business
does influence the way his or her readers see you — and those readers could be
potential customers.
“But keep in mind that reporters aren't looking to write an advertisement when
they feature your company. Often, they're looking for industry experts who can
comment on topics that interest their readers. Instead of trying to use the media
as a megaphone for your sales message, research the outlets you're pitching to,
and try to help them serve their readers.”
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General Tips
Ultimately, all pitches are about building mutually beneficial relationships. Here
are a few fundamental tips you can use no matter who your audience is.
Make it conversational. "Don't pitch in the traditional sense of the word. Your
job is to listen to the needs of your potential new client or customer, and figure
out very quickly if you can help and add value. Customization is all about having
a real conversation and doing more listening than talking." – Jane Wang, CEO of
myHealthSphere
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General Tips
Provide real examples. "Use real stories that are relevant to the audience, to
illustrate why your business does what it does and how it helps buyers in your
target market. By utilizing current use cases, you can help an investor or
prospect understand more easily why you are the right solution for them,
keeping them engaged at the same time." – Brendan Morrissey, CEO and co-
founder of Netsertive
17
General Tips
Believe in what you're pitching. "If you don't believe in your business, why
should others? I have personally encountered entrepreneurs who didn't convey a
strong passion and belief in their business. If you don't genuinely believe in your
idea, leave it and start working on a new one." – Ulrik Bo Larsen, CEO and
founder of social media management platform Falcon Social
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GIVING A CONVINCING SALES PITCH
Focus on How You Say What You Say
When crafting a pitch, most people spend a lot of time and energy on the
content and the words they use, but not enough time on how they deliver the
message. Your body language and your tone of voice need to communicate
enthusiasm and confidence.
Ask to Understand
Want to know the real secret to success in sales? Empathy. You need to
understand your customers’ wants and needs, their challenges and problems, so
you can help them in the best possible way.
Source: http://www.forbes.com/sites/theyec/2014/04/18/10-steps-for-giving-a-convincing-sales-
pitch/#456beef73efe
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Present Solutions, not Features
As a founder, you probably love the details of your product or service. But your
customers aren’t interested in your product. They are only interested in what
your product will do for them: How will it solve their problems? How will it help
them to achieve their goals faster and with less effort? How will it save them
time or money? How will it protect them from risks?
Always translate your product’s features into your customers’ benefits. Don’t
focus on the bells and whistles, but what they do for them.
pitch/#456beef73efe
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Manage Objections
Most people fail to prepare for objections (which I offer some advice on here).
You want to identify the 10 to 20 most common objections and prepare answers
to them. Your answers should be clear and concise.
Rehearse your answers until they roll off your tongue. When you encounter an
objection in a sales conversation, you won’t need to think about which words to
use. Instead, focus on answering their question in a comforting manner. Keep
eye contact. Nonverbally communicate expertise to create trust.
If you prepare for objections, you will look forward to addressing them. Most
salespeople fear and try to avoid objections. Great salespeople do the opposite.
pitch/#456beef73efe
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Ask for the Close
• This step is all about confidence. Rehearse your close so you can deliver it
smoothly. It should be a natural progression from your conversation, so that
asking for purchase is the next logical step. Make your prospects feel as
confident about your solution as you are. It’s your job to guide your prospect
through every stage of the buying process.
Negotiate
• Once a prospect has made a buying decision internally, they will want to make
sure to get the best deal they can. It’s negotiation time.
pitch/#456beef73efe
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Follow Up
Everything we have covered before now are just 20 percent of the sales process.
Eighty percent of all deals are made in the follow-up.
Be consistent and reliable. Follow through on your word. Your margin of

negligence in the follow-up is between staying true to your word and over
delivering. Keep following up until you either get a yes or a definite no. But
never ever interpret a lack of response or any other kind of message as a no.
Winning in sales happens in the follow-up. Be relentless.
pitch/#456beef73efe
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HOW TO PRESENT YOUR BUSINESS PLAN
Every entrepreneur has to present a business plan to outsiders at some point
if he or she is seeking a loan or investment in the company. Obtaining venture
capital funding, angel investment, or even bank loans for a business is
increasingly difficult in a tough economy. You don't want a poor pitch to impede
you ability to score financing for your business. In fact, it's imperative to have a
pitch and presentation that showcases your idea, your potential, your market
and your ability to provide investors with a return on their investment.
Source: http://www.inc.com/guides/present-your-business-plan.html
24
Prepare Your Pitch and Presentation
A business pitch consists of an effort to convince others that your idea for a
business is a good one. The pitch involves summing up your business plan --
going over your product/service offerings, your market, your leadership, and
why you will succeed. Informally, you may have done this a thousand times
already. "It can be as simple as your reality check in a one-person business, or
agreeing with a spouse or significant other, your team members or your boss,"
Berry says.
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In the end, you should think of the pitch and present process as a filter.
"If nobody wants to invest in your business, yes, you might be the true visionary
in a world of lesser beings, but -- no disrespect intended -- it's much more likely
that the world is delivering you an important message," Berry says. "Maybe you
need to revise your plan, go back to the drawing board and improve it. On the
other hand, maybe this idea has fatal flaws and isn't going to work, and your
failure to raise money has saved you a lot of heartache."
26
HOW TO MAKE YOUR BUSINESS PLAN STAND OUT
Be Clear About What You Have to Offer
Ask yourself: Beyond basic products or services, what are you really selling?
Consider this example: Your town probably has several restaurants all selling
one fundamental product—food. But each is targeted at a different need or
clientele.
Identify Your Niche
Creating a niche for your business is essential to success. Often, business

owners can identify a niche based on their own market knowledge, but it can
also be helpful to conduct a market survey with potential customers to uncover
untapped needs. During your research process, identify the following: Which
areas your competitors are already well-established? Which areas are being
ignored by your competitors? Potential opportunities for your business?
27
SUMMARY
This module helped you learn incorporate

the various aspects of a business plan
while developing a successful pitch to
sell your idea to potential investors and/or
customers. With this module the last steps
needed for completion of your business plan
were discussed, along with strategies an
entrepreneur can utilize to present the business
plan and make a pitch to investors. At this time
you should be ready to complete the executive
summary and prepare a pitch for your business
plan presentation to potential investors.
28
RESOURCES
10 Steps For Giving A Convincing Sales Pitch
http://www.forbes.com/sites/theyec/2014/04/18/10-steps-for-giving-a-
convincing-sales-pitch/#1d6fbb213efe
Elements of a Business Plan

https://www.entrepreneur.com/article/38308
How To Find Investors

http://www.forbes.com/sites/ryancaldbeck/2013/05/29/how-to-find-
investors/#3e60627d1bb8
29
RESOURCES
How to Pitch Your Business to Customers, Investors or Anyone Else
http://www.businessnewsdaily.com/7774-pitch-business-multiple-
audiences.html
How to Present Your Business Plan

http://www.inc.com/guides/present-your-business-plan.html
Writing a Business Plan

https://www.sba.gov/writing-business-plan
30
You have completed Module 8.
Once you close out of this Module you will see your assignments for
Module 8.
Module 8 Assignment One:
• In 2-3 paragraphs, write a 30-second pitch that summarizes the main

WHAT IS points of your business plan, including the product or service, the need
that it meets, your target market, your marketing strategy, and the
NEXT? investment opportunity or sales projections that make your business
attractive. This will be included in the Funding Request section of your
Business Plan Template.
• Submit your template as a Word document and upload it for the

Module 8 Assignment One.
31
You have completed Module 8.
Once you close out of this Module you will see your assignments for
Module 8.
Module 8 Assignment Two:
• Complete the Appendix and Executive Summary portions of your

WHAT IS business plan template. Submit your completed template as a Word
document and upload it for the Module Eight Assignment Two.
NEXT?
32
Module 8 Quiz:
WHAT IS After you complete the assignment for Module 8, close out of the
assignment section and you will see the Module 8 Quiz. After you
complete your quiz, please review it thoroughly and press SUBMIT. If you
NEXT? do not press SAVE, you may lose everything.
Module 8 Final Exam:
WHAT IS
After you complete the quiz for Module 8, you will see the Final Exam. After you
NEXT? complete your EXAM, please review it thoroughly and press SUBMIT. If you do not
press SAVE, you may lose everything. You must complete the Final Exam before you
can conclude the class.

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BUSINESS ENTREPRENEURSHIP

Note: The Executive Summary should be no more than one page.

“The executive summary is often considered the most important section of a

Financial features. Highlights the important financial points of the business

Be consistent and reliable. Follow through on your word. Your margin of

Be Clear About What You Have to Offer

Identify Your Niche

Creating a niche for your business is essential to success. Often, business

This module helped you learn incorporate

Elements of a Business Plan

How To Find Investors

How to Present Your Business Plan

Writing a Business Plan

Module 8 Assignment One:

• In 2-3 paragraphs, write a 30-second pitch that summarizes the main

• Submit your template as a Word document and upload it for the

Module 8 Assignment Two:

• Complete the Appendix and Executive Summary portions of your

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