Being an entrepreneur you’ve taken the plunge and started your own business. And now you can see what it can really grow into. But you are short of funds/ money to make it happen and you’ve already exhausted what you borrowed from your parents and friends. Where else can you turn? Well, you might consider angel investors, successful entrepreneurs themselves (HNI’s) sometimes look for ways to invest in growing companies with great potential and brilliant ideas.
But what exactly are they looking for? Mentioned below are a few pointers which guide you when you pitch to an angel investor?
1. A Story to start with.
Engage your audience right out of the gate; begin your pitch with a compelling story. And try to relate your story to your audience, even better! Your story should address the problem you’re solving in the marketplace and the benefit to the masses and the company in a subtle way but should associate with investor and draw his attention.
2. Less is always more
Verbose presentations and lengthy explanations will not impress investors, in short don’t go on and on about “my company will/shall…” etc., this most likely will turn them off. Present your business in a manner that’s short, sweet and to the point. Investors need to be confident that your business will attract and retain customers. If investors fail to get your concept in a short time span, they may presume that customers won’t understand it either.
3. Find partners whose wavelength matches your vision.
Most investors have investment theses that form the foundation on which they research, analyze, and invest in companies. Inside a single venture capital firm, each partner can have their own investment thesis, and it’s important to make sure at least one investor thinks on the same wavelength that involves your industry or domain.
4. Your Successes / journey so far
Brownie points can be earned by building some credibility. Take some time to share the relevant traction you’ve had. Blow your own horn! It’s an opportunity not to be missed. Impress the investors with what you and your team have accomplished to date (sales, contracts, key hires, product launches, awards received if any etc.)
5. Speak only your strengths and areas of expertise
If your startup has multiple founders, make sure you each stick to discussing what you’re comfortable with and what you’re an expert at. In other cases to better let the sales head or marketing head and so on speak about how they see to achieve the target audience but do remember to keep it short and precise. Get the investor attention get him to believe in your vision.
6. You’re not the only one smart, others are too
Know what you know, know what you don’t know and find the people who know what you don’t know. Build a team of credible experts. The smartest leaders in the world are those who surround themselves with smarter people. Investors are funding a management team as much as they are investing in a great business concept.
7. Your Revenue Model
How will you make money?
Be very specific about your products, marketing strategy and pricing and emphasize again how your market is anxiously awaiting your arrival and in short the benefit to the masses and in return reap profits. This is the part the investor is most interested in.
8. Don’t pitch on a Monday
Partners at every venture capital firm meet on Monday mornings to discuss potential deals and vote on investments. If you pitch on a Monday afternoon, you’ll be waiting a whole week to hear back on whether they’re interested in learning more or discussing a term sheet. By then, they’ll have listened to other pitches and may not hold the same level of interest they did on the previous Monday.
Ideally keep it mid-week be it Wednesday/Thursday so when they leave u can add “looking forward to hear from you by weekend”. This may not necessarily always work but when it does it shows.
9. Your Exit Strategy
Show you’ve done some due diligence on this exit strategy, including the companies you’re targeting, and why it would make sense 5, or 10 years down the road. If you’re seeking large sums of investment capital, most investors will want to know what your exit strategy is. Are you planning on getting acquired, going public (very few companies actually do), or something else?
10. Additional potential in future
The expression “wow there’s a lot more opportunities here” can put you on the winning seat. Let investors know that as you become successful, there are other interesting things you think you can do with your platform that aren’t in the numbers you’ve shared and that could actually be a lot bigger than what you’ve been detailing. It whets people’s appetite and gets them thinking of newer avenues.
11. Conclude with a Thank you note
You’ve been talking for nearly 20 minutes or so and they may be listening to other pitches that same day. Do repeat the pointers or highlights: “If there are three things I want you to remember from my presentation, it’s these three things.”
Appreciate the time they gave to listen to you and sum it all up eventually saying “looking forward to grow with you.”