Bill Payne has been enabling entrepreneurs through Angel Investing since before it was cool.

Six Days to Success - Securing Angel Capital - Day 3

Angels invest in businesses, not in products or technologies.  Angels want to know that you have given ample consideration to all aspects of the business.  Here are the topics that most angels want to hear in your PowerPoint presentation (10-12 slides only):

• Market Need and Business Model (very important)
• Industry and Market Overview
• Product or Service Overview
• Technology and Intellectual Property (Current & Future)
• Competition
• Competitive Advantages
• Strategic Partners
• Management Team
• Benchmarks for Growth or Additional Funding
• Funding Sought, Valuation, Use of Funds, Comparables
• Financial Projections

Angels need to be convinced that you can grow a business of scale (revenues above $30 million) in a reasonable period of time (5 years or less).  Do you understand the size of the market and what sales channels are necessary to rapidly grow the business?  Angels need to understand the competitive landscape and the intellectual property your company can use to keep competitors at bay.  Most importantly, angels need to be convinced that your management team is top notch - experience, integrity and passion are vital ingredients.  It is said that investors will fund an “A+” team with a “B” product every time over a “B” team with an “A+” product.  Why?  Because an A+ team can turn a B product into an A+ opportunity.

The biggest mistake entrepreneurs make in all forms of their business plan (written and verbal) is to spend too much time talking about their products and boring possible investors to tears with extended discussions of technology.  All presentations must be balanced.  Find ways to explain your product and technology quickly, so you can move past your product to discussions of the business.  Investors will dig deep into your product and technology during the due diligence investment phase.  During the first meeting, investors want a quick understanding of the product and then need to be convinced that the product is a “pain killer” not a vitamin pill, i.e., rather than providing a convenient solution, the product solves a critical problem for the consumer.  Investors need to be convinced that the “dog will eat the dog food,” that is, that your customers see enough advantage in your product to purchase from your company, rather than the competition.  Convince investors in the first meeting that you have a scaleable business with a real competitive advantage in your niche.  Convince investors in that meeting that your management team is equipped to rapidly grow this business and create great value for investors in 5-7 years.

Tomorrow’s installment is called:

 “THE BIG MEETING #2 –What is a Fundable Entrepreneur? Competent, Confident, yet Humble. Why Investors do not invest in Cocky, Demanding Entrepreneurs."

Sincerely,

Bill Payne

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Raising Money from Angels” Now

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