An explain article

#01 - The big idea of the business model

Above all, the passion for the topic is paramount. You can tell when the presenter is enthusiastic about the idea. It's all the more important for founders to share why the idea came about and what prompted the development of the business model. These stories are usually what stick in memory. If there is an exciting moment of idea generation behind the business model, then it is much more credible and convincing than a few statistics. Eureka!

#02 - The uniqueness of the idea

Investors don't put money into models that already exist in some form elsewhere. Therefore, it is important to point out in the presentation that the idea is truly unique. Of course, you should be able to prove that. Rare ideas that can ideally be explained through a business case demonstrate exclusivity and thus a compelling and unique opportunity for the investor.

#03 - Numbers, data, and facts

The hard facts should not be missing either. Investors want not only the idea but also to know how many customers exist for the idea and why these customers will buy the idea. Additionally, you should show how many customers buy alternatives or the costs incurred if customers do not buy the idea. This uncovers the market potential for the investor, allowing them to assess whether the investment is worth it.

#04 - The customer who buys the idea

Who buys the idea? It's not about a target group. The description of demographic characteristics such as "male, between 30 and 40 years old, living in the city" is too abstract for an investor. Ideally, personas are developed with psychological characteristics and information about their problems that can be solved, purchasing behavior, or various interests. These are presented to investors, explaining who you will be making revenue with later.

#05 - The minds behind the idea

Don't forget the people behind the business model. But be careful: this is not about the entire vitae of the founders. Much better are, for example, the three most important competencies that have already been proven. The investor must believe in the leadership team and be sure that they are pursuing a vision or can scale the business model.

#06 - Social components in business

If the business model has incredible potential to be successful on the market, that's wonderful. You should also address that. If you manage to incorporate a social component, it elevates the model once more. This is strongly linked to the customers, who might have additional value. Social components help reach both customers and investors.

#07 - Practice makes perfect

Besides passion and enthusiasm, practicing the presentation is crucial. So you should practice and perfect the presentation—under real conditions and not secretly, quietly in front of the laptop. And afterwards? Practice again! And again!

In addition to the presentation, you should also think further. A presentation cannot answer all questions in advance and is not intended to. In a pitch, you also don't have the time for that. All the more important is to have a convincing answer to all potential questions. Here, too, preparation is key. Why not talk about an exit possibility for the investor? If it is on the line, then it's time to show a slide describing an exit strategy for the investor. That can save the pitch. But if all the described points play together, it is probably not necessary at all.

Good luck to all companies, from start-ups to DAX corporations!