Entrepreneur pitches have a simple narrative — ‘My idea is great, this is the goal, I know how to get there, and I need this much capital. Trust me; I can do it. See my work/school pedigree.’
A pitch should be — ‘This is my goal, this is the unique capability I have created (or will create), it is a driver of business growth, is controllable, I need capital for these investments, and they will yield this result (value). Few things I need to discover (learn) and will do that with limited risk.’
Value (not valuation) is the objective of an entrepreneur. A target valuation is neither a goal of strategy nor a direct reflection of its effectiveness. Federer looks at the ball, ups his game, and does not react to the opponent.
An entrepreneur/CEO must demonstrate knowledge of:
1. Drivers of the business
2. The capability of capital allocation
3. Awareness of the consequence of capital use
4. Understanding of capital productivity
Entrepreneurs/CEOs can do this by aligning finance-based metrics that show potential for growth (profitable), drivers they control (or will), and capital use strategies.
Investors only need to know that an entrepreneur has the acumen of making strategic choices, using money, and effective execution.