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Pitch For Business Fund

Coach Stephen Michael writes: 7 Questions You Should Be Able To Answer Clearly When Pitching For Financial Investment

Scrap the Next Titan Nigeria it’s not so much a business pitch. Let’s talk about real business pitch for financial investments.

Here are 7 questions you should understand and also have a perfectly crafted answer to before you stand on the pitch podium asking someone to risk their hard earned money with you.

  1. What problem are you solving?

One thing I have noticed in 99% of the client’s I prepared for pitch is that they can’t distinguish between a problem and a solution statement.

When I ask you to tell me the problem you’re solving, I am expecting something negative that bothers a particular people who would constitute “the market”.

The more you’re able to clearly communicate the problem as something that is truly a problem (has negative effect) and that many people would want to pay to get solution, the better for you.

Let me show you what happened on Facebook when I asked my friends “what is the problem that Uber solves?”

The first comment knew what he was talking about but he was missing one important thing – the problem. “Getting safe ride at your comfort” is a solution not the problem.

Look at the second comment, “lack of convenience… going out to look for taxi…” is a problem statement.

These two guys are actually saying the same thing. But one is confusing the solution in the problem statement and has been unable to clearly put the problem in a clear statement.

Bottom line: your problem statement should be the negative impact of something that warranted the solution you aim to create. It should reveal concerns, issues, challenges or negative impacts of some events that propitiated your business.

Sujan Patel wrote an article on the 8 Startups That Are Making Waves By Solving Big Problems.

Here are some of the ways he put identified their problem and solution statement:

Problem: Web pages are full of data, but harvesting that data is often manual and always time-consuming.

Solution: Enter, a tool that allows you to scrape data from websites and transform it into an organized table or structured API in less than a minute with no coding or training required. According to the site, the tool can be and is used for everything from personal data projects to app creation, data journalism, database population, competitive analysis and much more.

When I Work

Problem: Most business owners managing hourly employees are still building work schedules using programs such as Excel, or worse, a paper and pencil. It’s an incredibly inefficient way to schedule and communicate with employees. 

Solution: When I Work is an employee scheduling and attendance app that can save business owners a lot of time. It uses an innovative blend of collaborative communication technologies, including the web, mobile apps, text messaging, social media and email, to make teams more efficient, more accountable and better prepared. With the app, managers can build the schedule from anywhere, and employees can request time off or trade shifts in seconds right from their smartphones.


Problem: When news breaks and sites need to update their content, old versions of the story remain out there, floating around the Internet. This causes confusion and makes organizations look unprofessional.

Solution: Turn to Fastly to quickly publish new content, delete old, outdated information and clear caches instantly. The company already has major high-profile clients, including Pinterest, Twitter, Shazam and The Guardian. The primary differentiator Fastly has to offer is the speed with which these updates are made. To date, the company’s innovative technology has raised over $50 million in venture capital.

Problem statements can take different forms depending on who you’re presenting to. The way a customer may interpret a problem is different from the way an investor would.

The investor looks at the bigger picture – the quality of the problem, the size of the market and trends and future possibilities; but the customer may just want to get to the basics or fundamentals of the issue as it affects her.

Customers may argue that they’re satisfied with current services or products (and that’s a personal opinion) meanwhile you know it could get better due to emerging trends or changes.

That’s why Henry Ford said, “If I had asked people what they wanted, they would have said faster horses.” And he’s right. We can get so used to what we have that we lose sight of other better possibilities.

Bottom line: keep writing more problems and reworking them to serve different kind of people and suitable for different pitches.

  • What is unique about your business?

Entrepreneurship is essentially about bringing something new to the marketplace.

Or doing something better than existing solutions or methodologies (also known as models) in the marketplace.

So if what you’re pitching is something that’s already saturated in the market or something that has a big player already dominating the market in that category, your chances of winning investment is almost zero.

In order to find out what is unique about your business you need to answer these two closely related questions:

  • WHY are you coming to market with this solution even though other solutions like this already exists?

Please don’t talk about your passion here.

Investors don’t invest in your passion, they invest in business.

So talk about the unique experience that your business is bringing that customers would desperately want to have – is it more affordable, more convenient, more comfortable, more narrowed niche, heck, it could even be that you have a particular large market that has not been addressed by the other top players and you want to be the first to get there.

  • WHY would customers want to dump existing solutions to take yours on?

From a customer perspective, why should your product or service be in the market?

These questions are almost similar but try answering them differently and see if your answer connects at some points.

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  • Who is your target market?

This is what market research essentially entails.

Who are you targeting?

During my studies in Marketing And Business Communication I learned a lot on market segmentation.

Let me share with you the 4 types of market segments you should familiarize yourself with when it comes to your business.

  • Demographic Segmentation – By personal attributes such as age, marital status, gender, ethnicity, sexuality, education, or occupation.
  • Geographic Segmentation – By country, region, state, city, or neighborhood.
  • Psychographic Segmentation – By personality, risk aversion, values, or lifestyle.
  • Behavioral Segmentation – By how people use the product, how loyal they are, or the benefits that they are looking for.


My marketing agency is Fordax Marketing Agency.

Problem: small businesses are struggling to get more customers due to the constantly changing marketing trends which they do not have the resources to catch up with. Because of this, they waste money on ineffective marketing campaigns and they go broke because they can’t get more customers to generate enough revenue.

Solution: Fordax Marketing Agency provides innovative marketing campaigns in order to help small businesses attract more customers and increase sales by up to 300%.

Segmentation: Fordax is a B2B (Business to business) so the features and qualities we will be discussing will be that of the business and not individuals in particular.

Segment Answers
Demographic Manufacturing, fashion, fin-tech, ICT companies looking for new ways to get more customers. Existing brands with budget for marketing. New companies entering Nigeria. Companies whose primary target customer are the millennial. Companies that are solving problems that people want to pay for.
Geographic Lagos, Abuja, Port Harcourt, Enugu, Anambra etc.
Psychographic Sees marketing as a core investment. Has no problem paying premium for results. Companies open to new ways of doing things.
Behavioral Result oriented. Ambitious companies. Value time and long term relationship. Appreciates creativity and new methodologies. Values contracts.

Notice how much the answers will change if my business was a B2C in which case I am focusing on the majority of individual customers. The list might get bigger and more narrowed because at that point I’m looking at people and not organizations.

The geographical segmentation might even include specific cities and neighborhoods occupied by my ideal customers. 

You will be able to do this better with the help of a coach. So get yourself a Miki coaching experience this week. Let’s trash this together.

  • What are some notable trends in your industry?

Every industry has some trends that point to its potentialities. These trends can also reveal something about why your business is needed perhaps because some older trends are dying away or are largely becoming ineffective in the face of new problems. Your business is coming up with new solutions to replace the poor trends.

You will learn about trends in your industry online. There are global trends and there are local trends. If there’s an emerging trend that may likely beat your business away in the nearest future, most investors would not put their money in it.

Take for instance:

  • You want to start a taxi business.

The problem: Uber and Taxify are growing trends under the car-sharing business model. They’re the future of taxi. They’ll eat you for lunch. Most investors would feel this way unless you have another angle – a superior tech that beats Uber and Taxify or there’s no hope of these companies entering your market environment in the next 5 years.

  • You want to invest money into production of automobile cars that use oil.

The problem: the world is moving to electric cars. It’s the future of automobiles and has potentials of sending many car companies parking in the next few years.

My point is, your business has to be in line with emerging trends of the future that are replacing ineffective ones of the past for investors to want to put their money in it.

Since investors will recoup their money in the future, the future is more importance to them than the present.

  • Who’re your competitors & what’s your advantage?

In marketing we often talk about direct competitors and indirect competitors. The direct competitors are businesses offering almost the same product or service you’re offering to the market.

The indirect competitors are businesses that offer alternatives to your solution. Alternatives are not exactly the same product or services but they offer similar experience in terms of satisfying consumer needs.

Domino’s Pizzas sells pizzas and McDonald sells hamburgers respectively. However, they both target hungry customers who want quick service and a cheap price. Therefore they are indirect competitors. Some people could go for one in the absence of the other.

Mr. Biggs and Sweet Sensation (or Tantalizer) are eateries. They’re direct competitors because one could walk into any one of them and still get almost the same thing – food, drink, quickly, in a nice environment.

You need to know who your competitors are, what they’re offering and what you’ll be doing differently. If there’s nothing new or revolutionary about what you’re bringing to the market, you really won’t make any business sense to a typical investor.


(but you really don’t have to copy competitive advantages; you should know what is true to your business). I just want to tell you the ones I’ve seen or heard about:

  1. Business Experience (my partners and I have a combined 21 years’ experience in the training and coaching business)
  2. Capital (we have enough capital to expand the business but we are looking for an investor with the right connection in politics and telecommunications)
  3. Improved product or service (we have created better products in term of XYZ)
  4. Price (we will sell at 3 times lower the current market price and still be profitable)
  5. Ease of access (this product has not reached to over 6 million people in the south east Nigeria and 8 other regions in the Northern part of the country with an estimated 12 million qualified prospects)
  6. Scalable (our business can easily scale because it relies on technology and cuts down lots of barriers experienced by similar businesses in the market)
  7. Niche (Unlike our competitors, our products are carefully and specifically designed for mid-level Nigerian bankers with less than 6 years banking experience)
  8. Variety (we will be offering a variety of products that work together to help customers get the best value at once with a little less than regular prices)
  9. First (we are the first to tap into this market and we hope to seize 30% of the market share in 12 months’ time)
  10.    Indigenous (most of existing business are foreign. With government support to indigenous products, we plan to take over the market in the next 3 years)
  • How much do you need? (or how much are you looking for?)

You can’t get all the money you need so whatever it is you’re asking should be just enough to accomplish the purpose of your business needs – not money to change your personal status.

Common reasons why people need funds include:

  • To start the business (probably the worse asking as many investors want to be sure you’ve started in the business on your own with some of your own capital before asking them to risk theirs)
  • To expand operation to other cities – makes sense and shows you’re a growing business with potentials.  
  • To buy more equipment and machines – equipment can be so expensive the only way to afford them is to raise fund. Having these pieces of equipment could help your business generate more revenue.  
  • For business operation – personnel cost, utilities, operations cost…
  • For marketing
  • Etc.

Know how exactly you plan to use the fund and what percentage of equity you’re willing to give out to the investors as stakes in your business.

If you’re greedy, or dishonest, they will know. So try to be as realistic and considerate as possible.

  • What is your revenue projection?

How much do you project that your business could possibly make in revenue in say 1-3 years?

Of course it’s based on calculated assumptions looking at some or all of these:

  • Market trends
  • Last year’s sales
  • Past experience
  • Comparison with other similar company sales
  • Or based on the strength of your distribution channels

Revenue projection gives a prospective investor a clue about how profitable your business could be, when it will break even and if it’s something profitable enough to deserve his or her financial investment.


VALIDATION – a proof that your business idea is a real demand.

No amount of words would convince an investor that your business is worth putting money in. Figures can be manipulated; revenue projection can be intelligently conjured –

What’s more important is your account statement or a record of your sales in the last 3 months or so.

If your mobile app idea got 500 downloads in 7 days of launch, that might not so huge but it’s a healthy validation to many investors. It means this mobile app is something that some people really want to have.

If you got some stores to pay upfront for your products because they need it and they did pay before you even produced the real products that will be delivered to them, that’s some validation there. 

It’s a proof that you’re not just creating some false assumptions, you have a proof that real people in real life actually want what you have to offer and are willing to pay for it.

Before you stand before investors, ensure that you have some validation that your idea or business is something that people want to buy. Nobody wants to invest money in something people don’t want to buy.

Any questions or thoughts?

Tell someone!

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