AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
Understanding Your Investors' Business Model when Pitching
To effectively pitch an idea, it's crucial to understand the investors' business model, which often seeks outsized returns that exceed typical success metrics. While an outcome like 20 times the initial investment may seem significant, venture capitalists usually aim for 1000X returns, making it essential to present your vision as expansive and monumental. For example, framing a company as a pioneering force in 'information commerce' instead of a niche product can substantially enhance the perceived potential. It’s also important to recognize that the goals of entrepreneurs and investors may not always align—what constitutes a win for an entrepreneur (a $100 million sale when owning 50% of a company) may not be viewed as a success by investors. Understanding these differences helps in aligning pitches and managing investor relationships effectively.