2 min read Pitching to Angel Investors: Competition & Competitive Advantage
If you want an investor to stop listening to your pitch presentation or stop reading the business plan, state how you don’t have any competition.
You might be surprised at how many entrepreneurs make this rookie mistake in their pitch presentations. We hear it constantly, and it’s almost certain that you’ll lose credibility with investors.
What Angel Investors Really Want
I believe that entrepreneurs who say they have no competition try to convey a broad opportunity to exploit a market. This will have the opposite effect.
The main reason is that the customer is solving the problem somehow now, even if indirectly compared to your solution.
There’s always another company competing for the same dollar and if the investor finds out about a competitor from someone other than the entrepreneur, it makes the startup look even more unprepared.
Competitive Analysis
The competitive analysis in your business plan demonstrates to potential investors that you understand the strengths and weaknesses of your business.
It also gives them a better picture of the market opportunity when researched thoroughly.
When researching the competition for your plan or pitch presentation, focus on answering the following:
- Who is out there competing for the same dollars that you’re going after?
- Are they directly or indirectly selling products, services, or substitutes that
compete? - What are their strengths and weaknesses in the market?
- How are they currently positioned in the market?
- In what segments of the market do they operate?
- What is their go-to-market strategy, and how does that differ from yours?
- What threats do they pose that may impact your business?
In other words, perform a SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats) on each of your competitors and compare them to your company.
- List the Key Competitors with their strengths/weaknesses in comparison with your
own. - Show Specific Competitive Advantages of your solution.
- Use Numbers to make the comparison. The more numbers, the more solid your company
looks. Use numbers to show market share, your economic benefit, etc.
Read more from the TEN Capital Education Center: https://tencapital.group/education/
Hall T. Martin is the founder and CEO of the TEN Capital Network. TEN Capital has been connecting startups with investors for over ten years. You can connect with Hall about fundraising, business growth, and emerging technologies via LinkedIn or email: hallmartin@tencapital.group
