Business Plan Pitch
Senior 6 · Entrepreneurship
Business Plan Pitch
Lesson 4 of 4
25 min
Two days after the competition, the Imbuto Dry team has three messages. They did not win the grant. The investor on the panel writes: "I liked your pitch. Can we meet next week? Please bring your accounts from the trial." And the banker asks for "a monthly cash flow forecast for the first year." (Illustrative.)
Many entrepreneurs think the pitch is the finish line. In fact it is the start of a second process, where most deals are won or lost: following up, answering hard checks, negotiating, and learning from every "no".
Definition
Due diligence: the careful checking an investor or lender carries out before committing money, to confirm that the business's accounts, contracts, ownership and claims are true.
Example: the investor asks for Imbuto Dry's sales records and the receipts for fruit bought from the 40 farmers named in the pitch.
Definition
Valuation, pre-money and post-money: the valuation is the value placed on the whole business in a deal. If an investor pays an amount for a fraction of the business:
Example: Frw 1,000,000 for 10% values the business at francs after the investment.
Tip
Follow up with something useful. A thank-you message that also answers a question you struggled with, or sends the figure you promised, shows reliability, the quality every investor and lender is really judging.
Worked example 1: what is the offer worth?
The investor offers Imbuto Dry Frw 12,000,000 for 20% of the business. (Illustrative.)
Step 1: post-money valuation.
Step 2: pre-money valuation. francs: what the investor thinks the business is worth today.
Step 3: the founders' share afterwards. .
Negotiating: if the founders want to give up only 15% for the same money, they are asking the investor to accept a post-money valuation of francs. They must justify the extra Frw 20,000,000 of value, for example with signed orders.
Worked example 2: investor or loan?
The bank offers instead a loan of Frw 12,000,000 at 16% a year on the outstanding balance, repaid in three equal yearly instalments of Frw 4,000,000 plus interest. Imbuto Dry forecasts a profit of Frw 16,800,000 a year (Lesson 2). (Illustrative terms.)
| Year | Balance at start (Frw) | Interest at 16% (Frw) | Total payment (Frw) |
|---|---|---|---|
| 1 | 12,000,000 | 1,920,000 | 5,920,000 |
| 2 | 8,000,000 | 1,280,000 | 5,280,000 |
| 3 | 4,000,000 | 640,000 | 4,640,000 |
| Total | 3,840,000 | 15,840,000 |
The equity option: the investor owns 20% for ever. If all profits were shared out, 20% of Frw 16,800,000 is francs a year, or over three years, and the share continues after that.
Evaluate: if the forecast is right, the loan is cheaper (Frw 3,840,000 of interest in total) and the founders keep 100% of the business. But the loan must be repaid even in a bad season, and the bank will want collateral or a guarantee. The investor shares the risk (no repayments if profits fall) and may bring advice and contacts. A cautious team might combine a smaller loan with a smaller equity stake.
A pitch is often the entry ticket to finance and support. These institutions are among those a young Rwandan entrepreneur can approach:
| Institution | What it offers entrepreneurs |
|---|---|
| Business Development Fund (BDF) | A company that supports small and medium enterprises with credit guarantees, lines of credit, matching grants, quasi-equity and advisory services, for individuals, start-ups, small and medium companies, associations and cooperatives, as well as microfinance institutions and SACCOs. |
| District employment and business development units | Consultancy, market access, product development, training, access to finance and basic accounting for job seekers, entrepreneurs and cooperatives, with Business Development Advisors present in every administrative sector who mentor and coach young and informal-sector entrepreneurs. |
| Rwanda Development Board (RDB) | The agency whose mandate is to accelerate Rwanda's economic development by enabling private-sector growth; its services include investment promotion, export and Special Economic Zone development, skills development and one-stop-centre services such as registering a business. |
| Kigali Innovation City (KIC) | A 61-hectare smart-city development in Kigali, whose construction began on 10 September 2024, developed by the Government of Rwanda with Africa50 and financed with BADEA. It is planned to host universities, office space, start-up incubators and accelerators. |
BDF, the district units and the Business Development Advisors are described on RDB's business procedures portal; RDB's mandate and Kigali Innovation City are described in RDB's press release of 11 September 2024. Services and terms change: check each institution's current offer before applying.
Warning
Do not sign the first offer in a hurry. Read every term, ask what happens if targets are missed, and take advice from a teacher, an accountant or a Business Development Advisor. Beware of anyone who promises funding in exchange for an upfront "processing fee": genuine investors and lenders do not ask you to pay to be considered, beyond clearly published official fees.
Business Development Fund Rwanda, "Sobanukirwa na serivisi za Business Development Fund (BDF): SACCO Refinancing" (in Kinyarwanda, about 2 minutes, 2018). A short explanation of the BDF service called SACCO refinancing. Watch for who the service is for and how an entrepreneur reaches it. It dates from 2018, so check BDF's current services.
Practice
Further reading
Sources and credits
Written by Ganzaa: the follow-up case, the flowchart, the valuation and loan examples, the tables and the practice items. Imbuto Dry, the offers and all their figures are illustrative (2026).
