Pitch Components

Business Model

Explain who pays, how much they pay, and how the business makes money.

Last updated

What & why

What it is
In a spoken pitch, the business model section answers a simple question: how do you make money? It should explain who pays, how much they pay, and how often they pay. Michael Seibel advises founders to own a simple business model instead of listing multiple monetization options. In live delivery, this matters even more. If the audience cannot repeat your model back after one sentence, it is still too muddy.
Why it works

A model the listener can repeat after one sentence is one they can evaluate, remember, and pass to a partner who was not in the room. Listing several revenue streams raises cognitive load and reads as uncertainty about which one actually works, which quietly erodes confidence. A single clear answer to who pays and how much signals that you have made the hard choice and understand your own economics, a competence cue. Simplicity here also makes the math checkable in real time, so the listener trusts what they can verify.

Before & after

Before

“We plan to monetize through a combination of SaaS subscriptions, marketplace fees, enterprise licensing, and potentially advertising once we reach scale.”

After

“Teams pay $49/seat/month. Average contract is 12 seats, or $7,000 ARR per customer. Our gross margin is 82% and LTV:CAC is 4.2x. We sell bottom-up: developers adopt the free tier, then their team lead upgrades.”

When you’ll use it

Presenting the business model slide in a pitch deck

Answering 'How do you make money?' from an investor

Explaining your pricing strategy to a potential partner

Justifying unit economics in a Series A diligence process

Comparing your model to analogous successful companies

Pro tip

One model, one sentence. If the listener cannot repeat it back, simplify again.

Questions & answers

What if I haven't figured out my business model yet?

At pre-seed, investors accept some uncertainty. But you should still have a hypothesis. Name the model you're testing (subscription, transaction, marketplace fee) and explain why you believe it fits your customer and market.

Should I show multiple revenue streams?

At seed stage, no. Multiple revenue streams suggest you haven't found the one that works. Pick your primary model and own it. You can mention expansion revenue as a future opportunity, but lead with the core.

Learn more

Michael Seibel - How to Pitch Your Company
OpenVC - Business Model Slide Best Practices & Examples

Practice this concept

Practice your pitch

Upload your founder pitch and get AI feedback on whether it covers all the parts investors expect to hear.

Try the AI Pitch CoachSee a pitch analysis demo