MODULE 5: ATTRACTING INVESTORS AND

OBTAINING FINANCIAL SUPPORT

Table of Contents
MODULE 5: ATTRACTING INVESTORS AND OBTAINING FINANCIAL SUPPORT ..............................................................1
Module Overview ..........................................................................................................................................................3
Learning Objectives: .................................................................................................................................................3
To-Do List ..................................................................................................................................................................3
Module 5 Key Vocabulary ..............................................................................................................................................4
Lesson 1: Why Seek Financial Support?.........................................................................................................................9
What is financial bootstrapping? ..............................................................................................................................9
Lesson 2: Financial Support – Bootstrapping...............................................................................................................10
What can an entrepreneur do to save money and help the business grow more quickly? ...................................10
Discussion: Bootstrapping Strategies ..........................................................................................................................10
Lesson 3: Debt Financing (Part 1) ................................................................................................................................11
What is debt financing? ..........................................................................................................................................11
How do loans work? ...............................................................................................................................................11
Lesson 4: Debt Financing (Part 2) ................................................................................................................................12
Where can an entrepreneur get a loan? .................................................................................................................12
Summary: ................................................................................................................................................................12
Lesson 5: Equity Financing (Part 1) ..............................................................................................................................13
What does it mean to sell ownership in a business? ..............................................................................................13
Lesson 6: Equity Financing (Part 2) ..............................................................................................................................15
Summary .................................................................................................................................................................15
Lesson 7: Finding Investors in the Social Network ......................................................................................................16
How does an entrepreneur find people to invest in the business? ........................................................................16
Summary .................................................................................................................................................................17
What is crowdfunding? ...........................................................................................................................................18
Lesson 9: Crowdfunding (Part 2) .................................................................................................................................19
What is donation-based crowdfunding?.................................................................................................................19
What is loan-based crowdfunding? ........................................................................................................................19
Summary .................................................................................................................................................................19

© 2020 by FHI 360. “Module 5: Attracting Investors and Finding Financial Support” for the Online
Professional English Network (OPEN), sponsored by the U.S. Department of State with funding
provided by the U.S. government and administered by FHI 360. This work is licensed under the
1
Creative Commons Attribution 4.0 License, except where noted. To view a copy of this license, visit
http://creativecommons.org/licenses/by/4.0/
Quiz: Module 5 Vocabulary Review .............................................................................................................................20
Lesson 10: Making a Pitch (Part 1)...............................................................................................................................21
An elevator pitch has four parts: ............................................................................................................................21
What is a hook? ......................................................................................................................................................21
Lesson 11: Making a Pitch (Part 2)...............................................................................................................................23
Part Two: Product Description ................................................................................................................................23
Part Three: Opportunity Statement ........................................................................................................................24
Part Four: Confident Closing ...................................................................................................................................24
Summary .................................................................................................................................................................25
Lesson 12: Creating an Effective Hook (Part 1)............................................................................................................26
What is the structure of an effective hook? ................................................................................................................26
Option 1: Share an interesting fact or statistic .......................................................................................................26
Option 2: Ask a closed question..............................................................................................................................26
Lesson 13: Creating an Effective Hook (Part 2)............................................................................................................28
Part 1 (Continued): Introducing an interesting situation ........................................................................................28
Part 2: How did the situation create a business opportunity? ...............................................................................29
Summary .................................................................................................................................................................29
Lesson 14: Adding Impact: Word Stress, Body Language, & Eye Contact ...................................................................30
Word Stress.............................................................................................................................................................30
Body Language ........................................................................................................................................................30
What is it like in your culture? ................................................................................................................................31
Summary .................................................................................................................................................................31
Discussion: Adding Impact in Your Home Culture .......................................................................................................32
Discussion: Making a Pitch ..........................................................................................................................................32
Module 5 Check ...........................................................................................................................................................32

2
Module Overview
Welcome to Module 5, the final module of the English for Business and Entrepreneurship MOOC!

In this module, we will learn ways to get the capital needed to implement a business plan.

The video lectures in this module will first cover traditional funding sources such as microfinancing and venture
capital. We will then focus on today’s crowdfunding movement and the ways it has made obtaining funding more
accessible. We will also introduce strategies and techniques that you can use to create a persuasive and well-
articulated multimedia presentation based on a business plan.

LEARNING OBJECTIVES:
By the end of this module, you will:

• Become familiar with ways to obtain funding for a start-up, such as microfinancing, crowdfunding, and
venture capital. Understand the opportunities and challenges presented by these options.
• Learn and practice vocabulary to discuss plans and goals for funding a business.
• Demonstrate your understanding of these texts and key course concepts through comprehension check
quizzes and a written discussion board response.
• Create a pitch to clearly and persuasively present a start-up project

TO-DO LIST

In order to successfully complete Module 5, please do the following:

1. Review: Module 5 lessons

2. Check-In: Score at least 70% on the following quizzes:
1. Module 5 Vocabulary
2. Be Brief!
3. Module 5 Check
3. Discuss: Join your colleagues in the following conversations:
1. Bootstrapping Strategies
2. Making a Pitch

3
Module 5 Key Vocabulary
Module 5 will feature the following words. These words may appear in quizzes throughout the course.

an angel investor (n)

"angel investor" by iconathon via the Noun Project is licensed under CC BYCC BY

An angel investor is a type of equity investor, usually a very wealthy person who
has started their own businesses successfully.

bootstrapping (n)

"long boots" by Graphic Nehar via the Noun Project is licensed under CC BY

Bootstrapping is a financing strategy in which the entrepreneur advances using

their personal funds and a lot of hard work.

to borrow (n)

borrow by priyanka via the Noun Project is licensed under CC BY

When you borrow something (such as money), you take it and use it with the
promise to return it.

4
debt (n)

debt by Econceptive via the Noun Project is licensed under CC BY

Debt is the money that one person must pay to another, usually as a result of a
loan. When somebody borrows money, we say they are "going into debt."

debt financing (n)

"Credit Card" by Eucalyp via the Noun Project is licensed under CC BY

Debt financing is a way of covering business costs by borrowing money.

an elevator pitch (n)

Elevator Pitch by Gan Khoon Lay via the Noun Project is licensed under CC BY

An elevator pitch is a speech that outlines an idea for a product or business in just
30 to 60 seconds.

5
equity (n)

“equity” by Nithinan Tatah via the Noun Project is licensed under CC BY

Equity is a share in a company or a company's stock.

interest (n)

"Interest" by Eucalyp via the Noun Project is licensed under CC BY

Interest is extra money that you must pay for borrowing money.

an investor (n)

investor by franky via the Noun Project is licensed under CC BY

An investor is a person who gives money to a business to make a profit.

a loan (n)

loan by ProSymbols via the Noun Project is licensed under CC BY

A loan is something (such as money) that is given to someone else on the

condition that they return it.

6
networking (n)

networking by Becris via the Noun Project is licensed under CC BY

Networking is the process of meeting new people.

to microfinance (n)

microfinance by Becris via the Noun Project is licensed under CC BY

To microfinance is to make a very small loan.

a microloan (n)

loan by Maxim Basinski via the Noun Project is licensed under CC BY

A microloan is a very small loan.

7
seed money (n)

seed money by Michael Thompson via the Noun Project is licensed under CC BY

Seed money is money an entrepreneur uses to pay their start-up costs.

a share (n)

"Shareholder" by Vectors Market via the Noun Project is licensed under CC BY

A share is a portion of ownership in a business

a share (n)

“revenue” by Gan Khoon Lay via the Noun Project is licensed under CC BY

A venture capitalist is a wealthy person or financial institution that invests in new

businesses that think they will be successful and grow quickly.

8
Lesson 1: Why Seek Financial Support?
an investor
investor by franky via the
Noun Project is licensed
under CC BY
WHAT IS FINANCIAL BOOTSTRAPPING?
bootstrapping
"long boots" by Graphic
Nehar via the Noun Project is
licensed under CC BY
In this video, we will review what it means to finance a business. We will also start
looking at financing options by reviewing bootstrapping.
One of the most challenging steps in starting a business is financing. It is very difficult to
find the funds or money needed to start and operate the business. Some entrepreneurs
have enough funds to pay for the business themselves. But most entrepreneurs need to
ask other people for financial support. In other words, they may need help from
investors. Investors are people who give money to a business in order to make a profit.
As we learned in Module Three, a business plan includes cost projections. These
projections can help entrepreneurs make plans for the financing of their business. They
can decide if they are able to pay for the start-up and operating costs or if they need
financial support.
In this module, we will look at the many different strategies for financing a business. We
will use mini videos in this unit to review several options. In this lesson, we will discuss
how to finance a business independently, without help from others. Later in the module,
we will look at ways to get financing from other people. Asking people for money is
never easy, but planning for the conversation can help.
Before we get started, let's review some important vocabulary.
Some entrepreneurs are able to finance their business independently. They don't use
any financial support from investors. Instead, they use their personal funds and a lot
of hard work. This financing strategy is called bootstrapping. The word bootstrapping
is related to an idiom in English: to pull yourself up by your bootstraps. This means to
improve yourself without help from anyone else. For example, someone might say,
“Don't expect other people to help you to succeed. If you want to succeed, you have
to pull yourself up by your bootstraps and do it yourself.”
Bootstrapping usually has two steps:
Step 1: Seed Money
First, the entrepreneur uses personal income and savings as seed money. Seed money
is money an entrepreneur uses to pay the business's start-up costs. In the same way
that a plant starts from a seed, a business starts from seed money. Entrepreneurs
might use money from another job, save up for several years, or sell personal things
to get enough seed money to start the business.
Step 2: Sales Revenue
After starting to sell products, the entrepreneur can use the sales revenue to pay
operating costs and grow the business. For example, sales revenue can be used to buy
supplies to make more products. Sales revenue can be used to hire another employee
or to open a new store space.
9
Lesson 2: Financial Support – Bootstrapping
Bootstrapping is easier for some businesses than others. This depends a lot on start-up and operating costs.

A simple bicycle delivery service has lower start-up and operating costs. We can imagine that those same costs
would be higher for a business selling specialty food products, like Cricket Flour. The bicycle delivery service will be
easier to bootstrap than a food business. A food business like Cricket Flour requires special ingredients,
equipment, and facilities. Usually, this type of business will grow very slowly and money is often tight. In other
words, money to pay for things is very limited.

W H A T C A N A N E N T R E P R E N E UR D O T O S A V E M O N E Y A N D
HELP THE BUSINESS GROW MOR E QUICKLY?

• Work a part-time job somewhere else while running the business.

• Operate the business from home while sales grow. Then, rent a business space somewhere else later.
• Start with few or no employees until sales grow, and then hire people.
• Advertise on free social media sites.

Some of these may be possible for some entrepreneurs, but not for others.

What other money-saving ideas do you think an entrepreneur who bootstraps could use? Share your ideas with
other participants in the following discussion prompt.

Because business costs can be very expensive, bootstrapping can be difficult and take a lot of time. The business
will probably grow slowly. Sometimes entrepreneurs bootstrap in the beginning and then ask for help from
investors later.

In the next lesson, we will look at different ways to get funding from investors

Discussion: Bootstrapping Strategies

What strategies can an entrepreneur use to save money when bootstrapping?

>>>> Please note that this quiz can only be completed in Canvas. <<<<

10
Lesson 3: Debt Financing (Part 1)
In this lesson, we will explain two different ways to borrow money to start a business: bank loans and microloans.
WHAT IS DEBT FINANCING?
debt financing
"Credit Card" by Eucalyp via
the Noun Project is licensed
under CC BY
HOW DO LOANS WORK?
© 2020 by FHI 360. "Best
Bicycle" for the Online
Professional English
Network (OPEN),
sponsored by the U.S.
Department of State with
funding from the U.S.
Government, and
administered by FHI 360.
This image is an
adaptation of “bicycle
courier” by We All
Design via the Noun
Project under CC BY. This
derivative is licensed CC
BY-SA by FHI 360 for use
in OPEN, sponsored by the
U.S. Department of State.
Sometimes, after reviewing cost projections and adding up personal funds, entrepreneurs
will see that they don't have enough money to cover costs. Bootstrapping alone may not
be an option. In that case, entrepreneurs will need to get help from investors. One way
to do this is to borrow money from somebody else. Usually, entrepreneurs must pay this
money back over time.
Some entrepreneurs are able to borrow the funds that they need from family or friends.
Others might need to borrow money from a bank. In other words, they need to ask a
bank for a loan.
When somebody borrows money, we say they're going into debt. This option for covering
business costs is called debt financing. Debt financing is covering business costs by
borrowing money. In this lesson, we will review financing a business through loans or debt
financing. Remember, this means that money is borrowed and needs to be repaid or paid
back.
Let's look at an example, using Best Bicycle Delivery Service.
The financial section of their business plan shows that the total start-up costs are $200.
The entrepreneur has $100 in personal funds to spend on start-up costs.
How much more seed money does the entrepreneur need? $100.
The entrepreneur decides to ask for a loan from an investor. The entrepreneur needs to
share the business plan and have an effective conversation with the investor. They need to
persuade the investor that the business has good chances for success in the future.
Maybe the investor agrees to give the entrepreneur a $100 loan. This loan will have some
requirements.
First, the entrepreneur must pay interest. Interest is extra money that you must pay for
borrowing money.
Let's imagine that this loan has a 5% interest rate. That means that the entrepreneur must
pay back the $100 borrowed plus 5%, or $5. The entrepreneur must pay back $105 in total.
Second, the entrepreneur has to pay back the loan within a time limit. Maybe the time
limit for this loan is one year. Every month, the entrepreneur must pay some of the money
to the investor until the total loan plus interest, $105, is paid by the end of 12 months.
11
Lesson 4: Debt Financing (Part 2)
WHERE CAN AN ENTREPRENEUR GET A LOAN?

A bank is one option. Usually, banks prefer to loan larger amounts of money than $100. This is because the bank
earns more interest, or profit, on a larger loan.

For example, 5% interest on a $10,000 loan equals $500. This is much more than 5% interest on $100.

If a small loan is needed, or if a traditional bank will not work, entrepreneurs have another option, microfinance.

Micro as in the word microscope means very small. Microfinance means to make a very
small loan.

Microfinance institutions are organizations that provide very small loans to people who
cannot get money from a traditional bank. These very small loans are called microloans.
They are often used as seed money to start a business.

These loans can be as small as $20 up to a few hundred dollars. Microloans often have
microfinance higher interest rates than traditional bank loans. Microloan interest rates average about
30%, but they can be as high as 100% in some countries. This could mean a $100 loan
microfinance by Becris via
could cost $130 to $200 to repay.
the Noun Project is
licensed under CC BY
Some microfinance institutions also provide training for small business owners. They
provide support and advice to small business owners as they start their business and repay
their loans. They want the business to succeed to get their money back.

SUMMARY:

• Debt financing represents borrowed money that needs to be repaid, often with interest.
• Some people can get loans from friends and family.
• Most people get loans from banks or microfinance institutions.

In the next lesson, we will look at equity financing another kind of support that involves selling ownership of the
business.

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Lesson 5: Equity Financing (Part 1)
equity financing
“equity” by Nithinan Tatah via the
Noun Project is licensed under CC
BY
WHAT DOES IT MEAN TO SELL OWNERSHIP IN A BUSINESS?
© 2020 by FHI 360. "Cricket
Flour" for the Online Professional
English Network (OPEN). This
image is an adaptation of
“grasshopper” by Iconic, “spoon”
by Yazmin Alanis, and "protein"
by Kiran Shastry via the Noun
Project under CC BY-SA. This
derivative is licensed under CC
BY-SA by FHI 360 for use in
OPEN, sponsored by the U.S.
Department of State.
Welcome to Lesson 5 of Module 5. So far, we have learned about bootstrapping and
debt financing. These are both common ways to cover start-up and operating costs.
In this lesson, we will discuss a third option called equity financing. This option
involves selling shares to investors. Shares are ownership in the business. The word
equity means ownership. First, we'll discuss what it means to sell ownership in a
business. Then we will learn about different investors who might be interested in
buying shares or providing equity financing.
This time let's use Cricket Flour as an example. Imagine that an entrepreneur has
started this business. Startup costs were high because of the special supplies needed.
The entrepreneur bootstrapped or used personal savings for seed money. The
entrepreneur also used debt financing by taking out a small loan from parents. This
money helped the entrepreneur buy supplies. They were able to start selling new
products made from Cricket Flour in the family kitchen at home.
Now, the entrepreneur is getting lots of product orders. The entrepreneur needs to
open a new larger Cricket Flour bakery and hire an employee. The entrepreneur
needs more funds to pay for this. They decide to look for investors who are interested
in owning a share of the business. This type of investor is called an equity investor.
Remember, equity means ownership.
When entrepreneurs meet with possible equity investors, they do the same thing as
when they go to borrow money from a bank. They present the business plan and
have an effective conversation to persuade the investors that this business will be a
success.
In this case, they are also persuading the investors that this is a good ownership
investment. They are asking the investors to make an equity investment by buying a
share of the business. Like debt financing, equity investments also have
requirements.
Let's imagine that the Cricket Flour entrepreneur sells an investor a 40% share in the
company for $10,000 investment. What does this mean?
First, the entrepreneur gets $10,000 to help cover the costs of opening the new
bakery and hiring the new employee. Unlike a loan, this money does not need to be
repaid. Why?
13
Unlike debt financing, the investor will not get interest for this investment. Instead, the investor is now an owner,
along with the entrepreneur. The investor will get 40% of the business’s future profits. The entrepreneur will get
60%.

Also, as a part-owner, the investor gets some control of the business. For example, the investor will have a say in
decisions that affect the business. These decisions might be about how to grow the business or, even, whether to
sell the business. If the business is sold, the investor will receive 40% of the profits from selling the company. For
example, if the business sells for $100,000, the investor gets 40% or $40,000. The entrepreneur gets 60% or
$60,000.

14
Lesson 6: Equity Financing (Part 2)

Finding people to provide equity financing for business can be difficult. Let's look at who an entrepreneur could
ask for this kind of support. Equity financing can sometimes come from family and friends. But often,
entrepreneurs need to ask for support from venture capitalists or angel investors.

an angel investor a venture capitalist

"angel investor" by iconathon “venture capitalist” by Gan

via the Noun Project is licensed Khoon Lay via the Noun Project is
under CC BY licensed under CC BY

Venture capitalists are wealthy people or financial institutions that invest in new businesses that they think will be
successful and grow quickly.

They also often provide support to help the business grow as fast as possible. They do this because they see an
opportunity to make a lot of money from this equity investment. They can make this money from a share in the
profits or through the sale of the business.

Angel investors are also a possible support as an equity investor. Angel investors are usually very wealthy people
who have started their own businesses successfully. Later, they make equity investments in new businesses as a
hobby. They may be less interested in profit. They may be more interested in sharing their knowledge with other
entrepreneurs to help them succeed.

SUMMARY

• Equity financing is an option for financial support for an entrepreneur.

• Equity financing involves selling shares or ownership in the business to other investors.
• Equity financing also gives the investor a share of the company profits and some control over the business
in decision making.
• Venture capitalists and angel investors can provide this kind of support.

Next, we will learn how entrepreneurs can find potential investors in their social networks.

15
Lesson 7: Finding Investors in the Social Network
In this video, we will discuss how entrepreneurs find investors through social networks, social media, referrals, and
networking

H O W D O E S A N E N T R E P R E N E U R F I N D P E O PL E T O I N V E ST I N
THE BUSINESS?

Many entrepreneurs will start by inviting friends, family, or other people in their
social network to invest. A social network is the different groups of people that
someone knows. For example, a social network includes family, friends, and
neighbors but it doesn't stop there.

A social network also includes friends of family, friends of friends, friends of

networking
networking by Becris via the Noun
Project is licensed under CC BY
neighbors, and so on. People often use social media websites to stay connected to
the people in their social network. On these sites, people communicate and share
information, photos, and videos on the internet using a computer or a mobile
phone.
Using social media sites makes it easy to stay in touch with a big social network.
The user can stay connected to friends and family that he or she does not see
regularly.

Often, an entrepreneur starts looking for investors by asking for support from their
social network. Friends and family might be more willing to invest than a stranger.
People usually prefer to do business with people they know and trust.

Sometimes people in the social network might support the entrepreneur in ways other than investing. For
example, a teammate could become an employee. A cousin could become a supplier. Someone who rides the
same bus to work could become a customer. A friend could help by giving the entrepreneur a referral. In other
words, the friend could send the entrepreneur to someone else who might help. Let's look at an example.

Imagine that an entrepreneur asks a friend to invest in the business. The friend is interested and wants to help but
is not able to invest. However, the friend has a neighbor who might be interested in investing. The friend gives the
entrepreneur the neighbor's contact information.

In this example, the friend gives the entrepreneur a referral to a possible investor. This idea can be stated in
another way using the verb to refer. The friend refers the entrepreneur to a potential investor. Personal
relationships and referrals are very valuable. Entrepreneurs often do a lot of networking, or meeting and talking
with a lot of people who might be useful to know. Especially for business reasons.

Networking can happen at any time and in any place. It can happen at a party with friends, a community event, or
even on a social media site.

Social Media Networking means using social media websites to communicate with other people and meet new
people. It is a useful strategy for entrepreneurs who are looking for support for a business. Through social media
sites, entrepreneurs can network with many people at the same time. This can improve their chances of finding
support and funding.

16
SUMMARY

• When looking for investors, entrepreneurs often start by asking people in their social network.
• A large social network can provide a lot of support.
• Networking can help an entrepreneur grow their social network.
• For many entrepreneurs, social media is a useful tool for networking and finding support.

17
Lesson 8: Crowdfunding (Part 1)
Thus far in Module 5, we have learned about three strategies for financing a business:

• bootstrapping,
• debt financing,
• equity financing

We've also learned about finding investors in a social network.

In this lesson and the next, we will learn about a newer option for financing that also uses social media. This
strategy is called crowdfunding. We'll review what crowdfunding is and explore how it works. Then, we will
consider the advantages and disadvantages.

WHAT IS CROWDFUNDING?

To understand crowdfunding, let's take the word apart and look at two words: crowd and funding. A crowd is a
large group of people. Funding is money given for a special purpose. Crowdfunding is getting a large number of
people to each give small amounts of money for a special purpose, often a new business.

Worldwide, there are hundreds of websites called crowdfunding platforms. These websites that help
entrepreneurs create everything needed to run a crowdfunding campaign. A campaign is a plan to raise money
through a number of activities.

A typical crowdfunding campaign often includes the following activities. First, the entrepreneur uses a website to
introduce the new product or business and explain financing goals. The entrepreneur describes the new product or
business. Then they explain how much money they are trying to raise and how they will use the money. These are
their financing goals. The entrepreneur also may offer rewards, gifts, or other benefits to campaign backers. These
are people who choose to support the campaign by investing. Finally, the entrepreneur collects funds from these
backers. The backers are often friends, relatives, or even strangers. They give money to the campaign on the
website, usually using their credit cards.

Common rules on crowdfunding platforms

Crowdfunding platforms often have rules. Here are three common ones:

Time limits
There may be a time limit for the campaign. For example, the campaign can last no more than two months, or
maybe six months.

Fundraising limits
There may be a total fundraising limit for the campaign. This means there could be a limit on how much money
the entrepreneur can raise in one campaign.

All or nothing rules

There may be a rule the entrepreneur can only receive the funds if they meet the fundraising limit within the time
limit. If the goals are not met, the funds are not collected from the crowd and the entrepreneur does not get any
money.

18
Lesson 9: Crowdfunding (Part 2)
In this lesson, we will talk about two different kinds of crowdfunding:

• donation-based crowdfunding
• loan-based funding

WHAT IS DONATION-BASED CROWDFUNDING?

With donation-based crowdfunding platforms, people donate or give money. They do this simply because they like
the business. Donors, or backers, might offer different rewards. Often the type of reward depends on the donation
amount. For example, for a small donation, backers may receive a T-shirt. For a larger donation, backers could
receive a prototype product. Or they might receive a tour of company headquarters or a thank you on the
company website. Backers might also receive early access to products. They might be able to buy products first
before they're sold in stores. One popular donation-based crowdfunding platform in the United States is
Kickstarter.

WHAT IS LOAN-BASED CROWDFUNDING?

With loan-based crowdfunding platforms, people support the business project by giving a small loan. That loan is
repaid with interest. This is also called peer-to-peer lending and it is a form of microfinance or debt equity. One
popular loan-based crowdfunding platform is Kiva, which is a nonprofit organization.

What are the advantages of crowdfunding?

• Crowdfunding can help the entrepreneur connect to a large network of possible investors.
• Crowdfunding can help test people's reactions to a product. Investors may make comments on the
website that help to improve the business or product.
• Crowdfunding is a form of free advertising. If people like the business or product, they might share a link
to the crowdfunding site on a social media site, like Facebook.

What are the disadvantages of crowdfunding?

• Understanding the rules and setting up a website requires a lot of time and effort.
• The entrepreneur may not receive the money if fundraising goals are not met.
• Describing the new product on a public website could increase the risk that someone else will copy the
business idea or model.
• Crowdfunding is online fundraising from a large group of supporters who may receive a special gift or
interest.

SUMMARY

Crowdfunding campaigns must follow rules and limits and involve some risk. But crowdfunding can be an effective
option for fundraising as well as a free marketing tool.

19
Quiz: Module 5 Vocabulary Review

This quiz reviews important vocabulary discussed in Module 5. You can use the Module 5 Key Vocabulary page for
help.

>>>> Please note that this quiz can only be completed in Canvas. <<<<

20
Lesson 10: Making a Pitch (Part 1)
In this lesson, we will discuss the kind of information that will help persuade an investor. We'll also learn about
how conversations with a possible investor begin.

Persuading people to give financial support to a business can be very challenging. An entrepreneur has to show
investors that the business idea is clear, the product is strong, and the opportunity is real. They must show that the
business owner is trustworthy, and the business will be managed well. As we learned in Module Three, a strong
business plan has a lot of this information.

A possible investor could be a friend, a family member, a bank, or a venture capitalist. Most of the time, the
entrepreneur will begin as a conversation with a possible investor. If the conversation goes well, the investor may
agree to read a business plan.

Therefore, the entrepreneur must first start conversations. They need to get people interested in the new product
or business. These conversations can happen at any time. They may be planned or unplanned.

The entrepreneur should always be ready to give a short, persuasive speech about the
business. In other words, the entrepreneur should be prepared to make a pitch. A pitch
is the words or speech an entrepreneur uses to persuade someone to consider
supporting a new product or business.

Entrepreneurs often prepare different pitches of different lengths, so that they can be
ready for any situation. They might plan a very short pitch, as short as 30 seconds, and
a longer pitch, maybe as long as 20 minutes.

an elevator pitch
Elevator Pitch by Gan Khoon
Lay via the Noun Project is
licensed under CC BY
In our work for this module, we will focus on the elevator pitch. An elevator pitch
outlines an idea for a product or business in just 30 to 60 seconds. That makes it short
enough to be given during the average elevator ride. This kind of pitch is often written
for a general audience. The potential audience includes possible investors, possible
customers, employees, or even suppliers.

This pitch could also be used in a video shared on a crowdfunding website.

AN ELEVATOR PITCH HAS FOUR PARTS:

• a hook
• a product description
• an opportunity statement
• a confident closing

WHAT IS A HOOK?

A hook is something that attracts someone's attention, like a hook with a worm that attracts a fish. Often, the
hook is about a situation that created the business opportunity. The hook should be brief, just two to three
sentences long.

Here's an example for the Best Bicycle Delivery Service:

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In my local market, there is so much traffic that it sometimes takes people an hour to drive just a few kilometers.
Many local companies can't make deliveries because there is too much traffic.

In persuasive speaking, a hook might be an interesting fact, a question, or a story. We will review these strategies
and the other parts of an elevator pitch in the next lesson.

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Lesson 11: Making a Pitch (Part 2)
an elevator pitch
Elevator Pitch by Gan Khoon
Lay via the Noun Project is
licensed under CC BY
© 2020 by FHI 360. "Best
Bicycle" for the Online
Professional English Network
(OPEN), sponsored by the U.S.
Department of State with
funding from the U.S.
Government, and administered
by FHI 360. This image is an
adaptation of “bicycle courier”
by We All Design via the Noun
Project under CC BY. This
derivative is licensed CC BY-SA
by FHI 360 for use in OPEN,
sponsored by the U.S.
Department of State.
In the last lesson, we looked at Part One of an elevator pitch. In this lesson, we will look
at the other three parts: product description,
PART TWO: PRODUCT DESCRIPTION
The second part of an elevator pitch is the product description. The product
description:
• describes the product
• explains how it is used
• and highlights the benefits
Here is an example:
Best Bicycle Delivery Service is a delivery service that helps busy people quickly deliver
goods in the local market and help the environment at the same time. It's very easy to
use. The customer calls a number, schedules a pick-up, and gives the package to a cyclist
who makes the delivery. Best Bicycle Delivery Service delivers important packages five
days a week, even in heavy traffic. It's much faster than a delivery truck and better for
the environment.
Did you notice that we started with the one-sentence product description we have seen
before? Also, did you notice how the product description includes adjectives,
intensifiers, and comparatives? This helps make the speech more persuasive.
Product Description Structure
Let's review a simple structure for Part Two:
1. Start with a simple one-sentence product description.
Best Bicycle Delivery Service is a delivery service that helps busy people quickly
deliver goods in the local market and help the environment at the same time.
2. Add "It's very easy to use."
Best Bicycle Delivery Service is a delivery service that helps busy people quickly
deliver goods in the local market and help the environment at the same time.
It's very easy to use.
3. Follow with an explanation of how to use the product.
Best Bicycle Delivery Service is a delivery service that helps busy people quickly
deliver goods in the local market and help the environment at the same time.
It's very easy to use. The customer calls a number, schedules a pick-up, and
gives the package to a cyclist who makes the delivery.
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A Best Bicycle Delivery Service customer uses the product in the following way.

• The customer calls a number.

• The customer schedules a pick-up.
• The customer gives the package to a cyclist who makes the delivery.

These sentences all start with the same subject, the customer. We can combine these three sentences into one
sentence using simple verb phrases:

The customer calls a number, schedules a pick-up, and gives the package to a cyclist who makes the delivery.

4. Continue with another explanation about something special the business offers.
Best Bicycle Delivery Service is a delivery service that helps busy people quickly deliver goods in the local
market and help the environment at the same time. It's very easy to use. The customer calls a number,
schedules a pick-up, and gives the package to a cyclist who makes the delivery. Best Bicycle Delivery
Service delivers important packages five days a week, even in heavy traffic.

5. Close with a strong comparative statement.

Best Bicycle Delivery Service is a delivery service that helps busy people quickly deliver goods in the local
market and help the environment at the same time. It's very easy to use. The customer calls a number,
schedules a pick-up, and gives the package to a cyclist who makes the delivery. Best Bicycle Delivery
Service delivers important packages five days a week, even in heavy traffic. It's much faster than a
delivery track and better for the environment.

PART THREE: OPPORTUNITY STATEMENT

Here, the speaker describes how the new product or business presents an opportunity in the market. Often, the
entrepreneur does this by sharing survey results from market research. This shows that the entrepreneur has done
the research and that the new product has a good chance of success.

For example:

Our surveys show that 90% of respondents buy and sell products by phone or online in the local
community and 80% of respondents are interested in using the Best Bicycle Delivery Service.

The speaker uses the phrase "Our surveys show that..." and follows with persuasive survey data. This allows them
to make a persuasive opportunity statement in one simple sentence.

PART FOUR: CONFIDENT CLOSING

For many people, the most memorable part of a pitch is the closing. A strong pitch finishes with three sentences.
These three sentences:

• remind the listener of the Company/Product Name

• express confidence in the idea
• invite further discussion

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Here's an example:

Best Bicycle Delivery is a great business opportunity. Here's my business card. Please feel free to contact
me if you would like to know more.

Notice that in the first sentence the speaker uses the positive adjective, great. This positive adjective helps
highlight the opportunity and describe the business with confidence.

Preparing a pitch like this helps an entrepreneur communicate clearly and more persuasively. However, delivery is
also important. In other words, the way the speaker makes the pitch can make a difference.

In the next lesson, we will review this idea in more detail.

SUMMARY

• A pitch is a persuasive speech that encourages someone to support the business in some way.
• The four parts of a possible elevator pitch are:
o a hook
o a product description
o an opportunity statement
o and a confident closing

In our next video, we will learn about different ways to create an effective pitch. Then, we will discuss the ways
entrepreneurs appear confident and persuasive when giving a pitch.

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Lesson 12: Creating an Effective Hook (Part 1)

In this lesson, we will learn how to create three different types of hooks using an interesting fact, a question, and a
story. We will also review some grammar patterns for creating an effective hook.

What is the structure of an effective hook?

There are two steps to create an effective hook:

1. Introduce a surprising or interesting situation in the local market.

2. Shows how the situation led to a problem or need, creating a business opportunity.

We will look at Part One in this lesson. We will look at Part Two in the next lesson. In Part One, the speaker has
three options for introducing the situation. The speaker could share:

• an interesting fact;
• a question; or
• a very short story

Let’s look at each of those in more detail.

OPTION 1: SHARE AN INTERESTING FACT OR STATISTIC

Do you remember the model elevator pitch from the last lesson?

The speaker shared an interesting fact about the market by describing a common experience.

In my local market, there is so much traffic that it sometimes takes people an hour to drive just a few kilometers.

The speaker could also choose to share an interesting or surprising statistic. A statistic is a number that represents
a fact about a group of people or a situation. Here is an example of a statistic:

In my local market, the average driver spends 93 hours sitting in traffic each year.

Both of these interesting facts start with the phrase, in my local market. This structure helps to draw attention to
the target market from the beginning of the pitch.

OPTION 2: ASK A CLOSED QUESTION

The second option for creating an interesting hook is to ask a yes or no question. Often in an elevator pitch, these
questions begin with the words, have you ever? For example:

"Have you ever tried to deliver an important package in a traffic jam? This is a common experience in my local
market."

This question asks about an experience that a potential customer might have. It doesn't matter whether the
listener's answer is yes or no. But it helps the listener imagine having the same experience.

Let's review some grammar rules for forming “have you ever” questions.

"Have you ever" questions use the present perfect tense. They ask about someone's experience up to or before
now. The phrase, “have you ever”, should be followed by a past participle. We form the past participle for regular
verbs by adding -ed to the end. Here are some other examples:

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• Have you ever wanted...?
• Have you ever wished...?
• Have you ever needed...?

This structure can be used to create a hook with a question.

Have you ever + Past Participle + Verb Phrase? This is a common situation in a specific market.

Here's the Best Bicycle Delivery Service example again. Notice how it follows these grammar rules.

Have you ever tried to deliver an important package in a traffic jam? This is a common experience in my local
market.

Sometimes, a hook can include both a question and an interesting fact. Usually, these hooks begin with the words,
"Did you know that...?" For example:

Did you know that it can take people an hour just to drive a few kilometers in my local market?

Notice that the speaker uses past tense to ask this question. Did you know...?

Why does the speaker say, "did you know" instead of "do you know?"

It might seem strange to use the past tense when asking about someone's present knowledge. But the speaker is
really saying, "Did you know this fact before I told you? Now you know."

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Lesson 13: Creating an Effective Hook (Part 2)

In this lesson, we will look at one more way of introducing an interesting situation, the narrative hook. With this
option, you introduce a situation in the target market by telling a very short story. Then, we will look at the second
part of an effective hook: the business opportunity.

PART 1 (CONTINUED): INTRODUCING AN INTERESTING

SITUATION

Option 3: The narrative hook

In an elevator pitch about a new business, the story is usually about something frustrating that happened to
someone. Often the story is about not having a good or service that they needed. Here's an example.

"Last week, I needed to deliver an important package. The traffic was so bad that it took me an hour to drive just a
few kilometers. And by the time I finally arrived at the post office, it was closed. This is a common experience in my
local market."

Notice that this story is told in the first person. In other words, the speaker uses the words “I” and “me” to tell the
story to make it more personal. Stories like this are most effective when they tell about an experience that the
target customer or investor might also have. Remember, in an elevator pitch, the hook must be very short.

Structure of a narrative hook

A narrative hook should be very short. Let’s look at our example. The speaker tells the story in only three
sentences.

Sentence 1: Describe something that I wanted or needed to do.

"Last week I needed to deliver an important package."

Sentence 2: Describe something that made it difficult for me to do it.

"The traffic was so bad that it took me an hour just to drive a few kilometers, and by the time I finally
arrived at the post office, it was closed!"

Sentence 3: Explain that the experience often happens in the target market.

"This is a common experience in my local market."

This completes our review of the first part of a hook. The speaker introduces a surprising or interesting situation in
the local market by:

• sharing an interesting fact or statistic.

• asking a closed question; or
• telling a very short story.

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P A R T 2 : H O W D I D T H E S I T U A T I O N C R E A T E A BU S I N E S S
OPPORTUNITY?
Next, the speaker connects the interesting situation to the business opportunity. They explain how the situation
created a want or need in the target market. In other words, the situation created a business opportunity. This
idea can be said with one simple sentence about the target customers. Let's review two possible structures:

• target customers can't do something, or

• target customers need something.

These two possible structures might also end with a reason. We can use a phrase starting with "because" to add
the reason

Example 1: Target customers can't do something

"Many businesspeople can't make deliveries because there is too much traffic."

Example 2: Target customers need something.

"Many people need a faster delivery option because driving in traffic takes too long."

After this sentence, the hook is complete. The speaker can move on to the next part of the pitch, the product
description.

SUMMARY
An effective elevator pitch often starts with a hook that includes two steps:

1. Introduce a surprising or interesting situation in the local market with an interesting fact, a question, or a
story.
2. Show how the situation led to a business opportunity.

Next, we will review how entrepreneurs and businesspeople add impact to their pitches by using word stress, body
language, and eye contact.

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Lesson 14: Adding Impact: Word Stress, Body
Language, & Eye Contact

In this lesson, we will look at how entrepreneurs make their elevator pitches stronger by using their voice, body
language, and eye contact. In the last lesson, you learned how entrepreneurs use effective hooks to get the
attention and interest of investors.

In this lesson, we will not look at what they say in a pitch. Instead, we will look at how they say it. We will look at
how they use:

• word stress
• body language, and
• eye contact.

Word stress, body language, and eye contact all play an important part in helping people understand and
remember an elevator pitch. Let's start with voice.

WORD STRESS
Entrepreneurs can use their voice to stress important words in their pitch. Remember, that stress makes words
sound louder, longer, and higher pitch. Specifically, it's a good idea to stress the intensifiers.

As you remember from Module Three, intensifiers are the words "much", "very", and "even". Let's look more
closely at three sentences from a pitch for Best Bicycle Delivery Service.

• Our service is very easy to use.

• Our service is very easy to use.

• We deliver important packages seven days a week, even in heavy traffic.

• We deliver important packages seven days a week, even in heavy traffic.

• It's much faster than a delivery truck.

• It's much faster than a delivery truck.

Do you hear the difference?

BODY LANGUAGE
An entrepreneur's body, hands, and eyes are important for communicating their message. These can be very
different depending on your culture.

In North America, people expect entrepreneurs to be trustworthy. If someone is trustworthy, people will believe
the message and feel comfortable investing with the business. People also expect entrepreneurs to appear
confident. A confident entrepreneur is someone who looks certain that the business will succeed.

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Body language in North American business culture
Here are three ways that North American entrepreneurs show that they are trustworthy and confident:

Speaking with hands and arms

In North America, most entrepreneurs use their hands and arms to make gestures while they speak. They do not
put their hands in their pockets. In North American culture, hands in pockets may be seen as unprofessional.
People may think it is too relaxed or informal. Also, people are more likely to distrust someone who has their
hands in their pockets. People may think that someone with their hands in their pockets is hiding something.

Smiling

Entrepreneurs in North America try to smile a little. Research shows that in North American culture, a small smile
means someone is trustworthy.

Making eye contact

In North America, entrepreneurs are trained to look directly into people's eyes. If an entrepreneur is talking to
more than one person, he or she tries to look at each person equally. If an entrepreneur is making a video, he or
she looks straight into the camera. Then the audience will feel like the entrepreneur is looking at them.

WHAT IS IT LIKE IN YOUR CULTURE?

These behaviors communicate trustworthiness and confidence in the North American business culture. Is it the
same in your culture? Is it okay to make direct eye contact and smile at people you don't know well? Is there
another way to show that you are friendly and trustworthy?

You can discuss these questions in the optional discussion board on the next page.

SUMMARY
Stress, body language, and eye contact can help make an entrepreneur's pitch stronger and more persuasive.

Now, you're ready to write a pitch for a new product or business. Have fun and good luck.

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Discussion: Adding Impact in Your Home Culture
In Lesson 14, we looked at body language in North American business culture. We learned at North American
entrepreneurs may add impact by

1. using their hands and arms to make gestures while they speak;
2. keeping their hands out of their pockets;
3. smiling; and,
4. making eye contact.

What is it like where you live? Would you follow these same guidelines? What advice would you give to an
entrepreneur making a pitch in your home culture?

>>>> Please note that this discussion can only be completed in Canvas. <<<<

Discussion: Making a Pitch

In this course, we have looked at several business cases: Cricket Flour, WeCyclers, and Best Bicycle Delivery
Service. We have also discussed several other products such as paperclips and taxi services. Perhaps, you have also
been thinking about an idea for your own business.

In this final assignment, you will practice making a pitch. You can use one of the businesses or products already
discussed or you can think of your own idea.

Option 1: Write an elevator pitch for an existing idea, such as Cricket Flour, WeCyclers, Best Bicycle Delivery
Service, paperclips or a taxi service.

-OR-

Option 2: Write a pitch for your own business idea.

Write a short pitch in 75 words or less. You should be able to deliver the whole pitch in 30 seconds, the same
length as the average elevator ride.

>>>> Please note that this discussion can only be completed in Canvas. <<<<

Module 5 Check
Please answer one question to verify that you have completed all activities in Module 5.
You must choose "Yes" in order to move on in the course.

This quiz will count as 1 point toward your grade.

>>>> Please note that this quiz can only be completed in Canvas. <<<<

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