Publication number: ELQ-65289-1
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How to Convince Investors Of Your Competitive Edge
Learn how-to to assure potential investors that your product or solution is the right investment to kill the competition
Introduction
Most entrepreneurs are quick to assert to potential investors that their product or solution will kill the competition, but unfortunately your opinion alone is not enough to convince most experienced investors. They want quantifiable facts and figures on how your offering compares to recognized key players in your domain, and quotes from recognized third-party experts to back you up.
Of course, we all know there are no guarantees, and we like your passion and commitment to future results. We certainly want to hear about any positive feedback you have from potential customers on your idea, your prototype, and your business model, but that better not be the end of the story. We want to see a documented business plan that clearly addresses this challenge.
There are a myriad of other important ways that you can demonstrate your competitive advantages in your presentations, discussions, and business plan, including the following:
- Step n°1 |
Convincing Market Research
First of all, you need some convincing market research that your solution addresses a real and growing problem. A competitive advantage to a non-problem or tiny niche is not interesting to investors. They want to be convinced that you are attacking a large opportunity, preferably in the billion dollar range, that will continue to grow at least ten percent per year, without a solution.
- Step n°2 |
Competitive Analysis
Secondly, they want to see your competitive analysis of how you stack up to the top players in the space, by name, with quantitative comparisons and customer value. Skip the fuzzy marketing terms, like “easier to use” and “more functions.” Avoid the temptation to narrow the scope so far as to conclude that you have no competitors, since investors might conclude you have no market.
