This article by Mark Suster gives us two methods to describe the competition to potential investors.
One involves a feature comparison with Harvey Balls, where it is important not to mark yourself as better than the competition in every category (or investors won't believe you). The other method suggested is to draw a consulting-style two-by-two matrix/graph, on which you chart your competitors to show how your company stands out.
Pitfalls to avoid include claiming that you have "no competition" (generally only novices say this), or claiming that the competition just sucks (if they've been in the market for half a decade longer than you, they're probably doing something right).
