What is the best way to pitch a potential angel investor?
As with any investor, you want to be prepared with a thoughtful presentation, answers to questions you foresee angels asking and a way to get them excited about not just your vision but your unique ability to execute upon this vision.
So let’s assume you’ve been through ChubbyBrain’s Funding Discovery Engine and identified some potential angel investors and have your paperwork (executive summary and presentation) in shape ready to pitch angels.
Here are some tips for when you pitch to angel investors.
- What is your ask and why? Know how much money you need and the clear use of proceeds you expect if successful in raising the money. You want to be specific in terms of amounts and where the money will be deployed and the results you foresee. Investors should feel like you have a plan and that you will be a careful steward of their money. Remember that angels are investing their own money so if they feel like you are being judicious and thoughtful in where to spend but also doing so in a way that will grow the company, they will like this.
- Create summaries. While you may not always need a compelling business plan summary to communicate with investors, you should prepare a brief but exciting email, one page at most, outlining the growth prospects, type of business, and potential investor payoff. Prepare an executive summary as well.
- Time is in short supply. For wealthy people such as angel investors, time is money. Come prepared with solid arguments about the product or service, its marketability and with evidence of commitment to the business in the form of sweat equity and investment. Don’t waste their time.
- Tell your story quickly. You not only have to be quick, but remember you are competing for the investor’s attention in a Blackberry world – seeing your potential investor(s) texting is not a good sign. Make your presentation entertaining from the start to get the investor(s) hooked. Tell them about the problem you are solving, followed by interesting information on the founders and how they came together with the business idea
- What makes you the team to back. Briefly tell about unique strengths, background and skills, and how the team will be able to give the proposed business a market edge.
- Make it interesting. This means changing your delivery pace throughout your presentation. Speed up when telling stories, allowing you to get through the slides rapidly. Then slow down as needed at more detailed financial and projection slides. Practice will help you perfect your presentation skill.
- Presentation matters. For a PowerPoint presentation, make sure your slides have style. Get help if you need to add vibrant colors and attractive layouts. Make your slides simple, but interesting and professional
- Finish strong. End with a strong message and key points you want the investor to remember. Most presentations end with financials, which, although important, are dull. Instead, end with a slide that gives the key elements as to why they should invest their money in your company
- Don’t make it up on the fly. If you don’t know the answer to a question, say so, and promise to get back to them. Don’t fake it. Angels put a high value on trustworthiness. In fact, acknowledging weak areas will let angels know you need their help and can actually add to your credibility
- A final word of caution. Show enthusiasm, but don’t force it. If a presenter is too excited, it may come across as being phony and credibility is lost. Show your passion through being prepared with a well, thought-out business plan. Deliver your presentation with confidence
- Don’t forget the ask. Always make sure to make clear your ask. “We are looking for $X to get a, b, and c done” or “We would like the opportunity to present our larger vision to you at your next Angel Group meeting on Y date.” Your ask is critical. Don’t make the investors guess what you need or bury it up front and expect them to remember.