Have you thought seriously about what you will present to an Angel Investor when you meet them to discuss your funding requirement with them?
Which of the following are you intending to present to a prospective Angel Investor?
- Executive summary
- Abbreviated business plan
- Complete business plan with appendices and supporting material
- Prepared investment pitch
If you selected (1) executive summary or (2) an abbreviated business plan or (3) a complete business plan with supporting material, then it may come as a surprise to you that this would not have been the best strategy to follow as an entrepreneur seriously considering raising capital.
If you chose (5) as an answer, then this article is a MUST READ for you!
What we recommend
Given the opportunity to present to an Angel Investor, the best answer would have been (4) a prepared investment pitch. Once your first meeting is set, Venture Giants strongly encourages you to make the upfront effort of being prepared and organised to sell yourself and your story properly.
Let the Angel Investor see your energy and enthusiasm and look them in the eyes when you speak to them, demonstrating the confidence that comes with being properly prepared.
Angel Investors want to know who you are and why this is such a good opportunity for them. In the first meeting, the last thing you will want to do is overwhelm them with too much information.
A strategy to follow when meeting an Angel Investor for the first time is to connect with them. Seasoned angel investors will pass on a seemingly good angel investment opportunity if they don’t have confidence in the people leading the charge. If your pitch is successful and you’ve managed to capture their interest, there will be a Q&A session that immediately follows.
It is common for Angel Investors to take on the stance that they are not investing in your idea or business plan but are investing in the entrepreneur, so adopting this mindset whilst preparing your investment pitch and investment summary can be beneficial.
The thought and preparation that goes into making a professional pitch will also prepare you to effortlessly answer questions such as:
- What is your market opportunity?
- What is your competition?
- What is your competitive advantage?
- What are your strategic plans?
- What’s in it for an Angel Investor?
- What about the risks and the rewards?
- How about the exit strategy?
Having an Executive Summary or an Investment Summary as a leave behind is also a good idea. If you have invested your own capital into your business, then including this in your investment summary is a must! Business Angel Investors want to see as much investment capital from an entrepreneur as possible. If you have a serious vested financial interest in your company and its success – you will likely work harder to insure that the business succeeds.
It is important to understand the main difference between an Investment Summary and an Executive Summary. Remember your Investment Summary must answer and target ‘what’s in it for an Angel Investor’ and essentially be your elevator pitch condensed into a paragraph.
Your Investment Summary must target questions like: what makes your business idea an attractive angel investment opportunity? How much angel finance is needed? How will you spend your angel capital? The link to the article above explores how your ‘Investment Summary’ is a vital part of the business finance process and the main differences between an Executive Summary and an Investment Summary.
Your biggest challenge on your first meeting with an Angel Investor will be in making your elevator pitch and in telling your story under pressure. You will be put under the spot in the Q&A session after your elevator pitch, which will most likely be 20-30 minutes long! Time it – if an angel investor stays for longer – it could well be a positive sign that are making great progress. But, remember most Angel Investors are going to try to push your buttons and catch you out – it’s in their interest to do this, so, be thoroughly prepared!