Importance of pitch in business

A pitch is a presentation of a business idea to potential business shareholders. People pitch a business because they require business resources. If the goal is to raise startup cash, the target of the pitch is a business investor. Investors don’t spread pitches across the table and pick the ones to fund based on financial projections and return rates. A Good Pitch is submitted to venture capitalists are more similar than they are different anyway. Specifically, they all project fourth- or fifth-year sales of $50 million. Anyone who can boot Excel can achieve these theoretical results.

Generally, venture capitalists want three to five years of projections to help them do three things:First, understand the scale of your business.

Second, examine the assumptions of your business model.

Third, determine how much capital you’ll require.

Here is how three leading investors describe what they look for in financial projections.


It would help if you were looking for a five-year forecast related to pitch with some detailed assumptions for the first couple of years where some level of visibility exists. The later years are more to understand revenue growth as a proxy for whether the entrepreneur is thinking significant and understanding the key drivers such as capital intensity, headcount growth, etc. In totality, the financials are more of a ‘gut check’ than anything else: Can the business be big enough in a reasonable amount of time to provide the kind of returns that we are looking for? And are the underlying assumptions sane?”



Believe it or not, financials for startups have become irrelevant,” was Doug’s answer, so I asked, “So in a business plan or pitch to Sequoia, people don’t even have to cover it at all? You don’t care at all?” To which he responded, “Not at all in startups. We care about how big the market is, how long to build it, how many engineers, the usage and engagement, and so on.”


Mostly, the early/seed stage investments or pitch plans of an entrepreneur will not meet their five-year pro formula, but still, the entrepreneur has to have sufficient details to show how he or she is thinking about the business. It’s not science, but it is a sort of Impressionist painting by the numbers of what the entrepreneur is trying to build. This plan can be broken down into provable hypotheses and experiments that allow the entrepreneur to test pieces of the model as the company grows. These pieces are natural inflection points in the business plan where pivots can be made, and they are also wild places for different rounds of fund-raising: the series A, B, and C.”

The point is that investors are not looking for detailed forecasts containing every conceivable line item. They’re looking for the big picture and trying to understand the kinds of assumptions you’re making about your business.

One way to improve your forecasts is to build them from the bottom up instead of the top down. First, let’s review the wrong way: taking a considerable number at the top and multiplying it by an easy-to-achieve market share.

Let’s apply this method to selling dog food:

According to the Humane Society, there are 85 million owned dogs in America.

Each dog eats two cans of dog food per day.

The total market, therefore, is 170 million cans per day.

Let’s assume, conservatively, that you can achieve a 1 percent market share or 1.7 million cans per day.

Let’s also assume that each can cost one dollar.


This means your company will have $1.7 million in revenue per day—again, being conservative. This is a mere $620 million in annual revenue.

Now let’s examine the right way, which is to start from the bottom at zero dollars and estimate how many customers you can reach and close:

Using every SEO trick, partnership, and social media technique, you can get 50,000 visitors to your site per month.

One percent or 500 will buy all sixty cans needed for the month, so monthly revenue is 500 people x 60 cans x $1/can = $30,000.

You may get more visitors and improve your closed sales percentage, but this is a realistic baseline: $30,000 per month or $360,000 per year.

Three hundred and sixty thousand dollars is a long way from $620 million. Maybe $360,000 is too pessimistic, but your actual results will be a lot closer to $360,000 than $620 million.

All of this can be easily built for you through HyperEffects. HyperEffects provides you with various ways to upgrade your business model through digital services such as providing an official website for your business, providing a mobile-friendly application, Business plans, and business marketing.

So do checkout HyperEffects today