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Pitching a business in the middle of a pandemic

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We are in the midst of a pandemic. A pandemic that here in Australia, with its continual curfews and lockdowns at least seems to have no end on the horizon.

This is causing operational chaos for many SME’s and start-ups. Whilst many (established) platform players have prospered, the tech sector, whilst better prepared and more flexible than many other verticals is not immune from the disturbance.

However, here are a few often overlooked truths regarding the situation:

  • Sophisticated investors understand that inputting their capital into companies during a market downtime is optimal. If a start-up has good bones, a great story, solves problems and can survive in the worst of times then the odds of success are far higher.
  • Investors seek tangible evidence of personal qualities such as (1) honesty; (2) transparency; (3) and drive from entrepreneurs. This can (and should) be communicated during any pitch for capital investment.
  • Additionally, serious investors want to know and understand why customers will use your product over and above the competition. Nail this portion of the pitch and reinforce with data and you may be on to a winner. A study from the University of Oxford in the 1990’s concluded that behaviour changes during difficult times. In times of crisis, folk first become more conservative… but then they act.
  • Remember, when you are building a business you should always be looking to minimise costs and creating a runway. If it saves you money, then do it. If it will create revenue and margin, what are you waiting for? Absorbing this habit will prove to potential investors that you can manage a budget.
  • Investors love a product that has a proven track record of generating revenue. Pre-revenue deals are inherently risky for the investor. The odds of success significantly lower. If the product owner can prove that their is a market for the product at the price point the models forecasts are based on then you are onto a winner.
  • Its a trope as few (if any) of us have lived through a war, however it is comparable. Product owners are Generals; and as a result they need to be strategically minded and make the tough decisions needed to move the business on. Entrepreneurs should be prepared to seek outside consulting jobs, or take those low interest loans in order to keep a business afloat. The core strategy is to focus on sustainable growth. Do not fall into the trap of scaling for the sake of scale.
  • Finally, do not be scared. Stay level headed and do not be distracted.
Related article:
How to write and visualise an investor-friendly business plan