“Do you want to spend the rest of your life selling sugared water, or do you want to change the world” Steve Jobs
Pitching to angel investors is a sales process. The objective is to create an appetite to invest in your business opportunity.
1. Capture attention
Tell them about you, your killer team, the problem and your awesome product, the traction gained and the (significant) potential. In more detail explain your business model, how you add value to customers, how you plan to obtain customers, distribution and revenues and where, how and why you are better, different or protected from competitors.
2. Create interest
The best way to create interest is to demonstrate traction; that customers are buying the product/service in increasing numbers. If it helps investors understand the product or technology then a demo, mock up or screen shots may be helpful.
3. Build desire
Show how revenues and cash can be developed in the near term, and what sort of value could be built over a 3-5 year period.
4. Confirm action
Summarise the funding that is required and how it will be used, showing any relevant milestones. After positively responding to questions, connect with those who are interested, agree a next step and follow up promptly. Don’t forget to qualify their level of interest and their ability to participate in a funding round in the timescales proposed.
- Provide technical detail about the product
- Provide financial detail
- Overuse jargon or catchphrases
- Misrepresent the facts
- Use phrases like “if we can just get 1% of the market….”
- Use phrases like “likely trade buyers are Google or Facebook”
- Tell your life story
- Talk to the slides or read from a script
- Provide a summary of annual revenues, costs and profit over a 3 year period
- Indicate when you expect to break even and achieve significant milestones
- Explain how much money you are raising and commitments made to date
- Clarify how these funds will be used
- Draft, re-draft and practice the pitch
- Keep it to 10 slides max, some say 6!
- Be focused, passionate, engaging and clear
- Make it memorable…..for all the right reasons!
The final part of this blog series will focus on how to take the investor enthusiasm you have created to a completed funding round. It doesn’t have to be like chasing chickens in the back yard!