|Do you have a new business concept but lack the necessary capital to grow it? Have you tapped the resources of family and friends but still need additional financing for your business venture? If so, you may want to consider calling on an angel—an angel investor, that is.Angel investors provide early stage seed funds to start-up companies in exchange for returns and involvement in the company— such as serving on the board of directors. Angel investors contribute approximately 90% of seed capital to aspiring businesses. In fact, just last year, angel investors contributed a total of $22.5 billion to more than 66,000 entrepreneurial ventures. That is a lot of funding! And your business idea could be the next recipient if you can convince an angel to take a leap of faith for you. Keep reading to find out more.Secure a meeting with an angel investor|
Step one is to secure a meeting with an angel investor or angel investing group. Your social network or other online platforms are good starting points and email can be a good first point of contact. Be prepared by having USB drives you can provide to interested investors complete with your resume, executive summary and financial overview.
Presenting to angel investors
Once you secure a meeting, you will have a limited amount of time to knock the socks off your audience. Try to keep presentations to a 10-20 minute time span and limit your presentation to 10 slides. And, provide copies to investors in professional looking presentation folders.
Below is a breakdown of what information should be covered in your presentation in order to make the most of your 10 minutes of glory:
Explain what your company does. Briefly explain the problem and how your idea solves it.
- Talk about you and your team
Tell your story. Who are you and who are your key employees? How did your business venture come to be?
Describe in detail what the need (problem) is and how your product or service fulfills it. Explain who, specifically, your customers are.
How does your product or service fill a need or solve a problem. Now is the time to pull out your prototype or product sample and/or to share focus group or survey research.
What makes you different from the competition? Who is the competition?
- Explain your business model
Share your business plan. This is your chance to tell potential investors how your idea will make money. And how you will manage it going forward.
- Lay out your marketing plan
Share your marketing plan. What is your budget? How will you promote your business? Bring promotional items such as polo shirts or laptop bags to gift your audience with.
- What is the current status of your company?
Emphasize your company’s accomplishments and successes. Use charts and graphs as proof.
- Provide a financial overview
Share projections for revenue, expenses, profits and losses for a period of five years.
- Explain the opportunity
Provide an estimate of how much funding is needed, return on investment (ROI), exit strategies, etc.
After the initial pitch, follow up. Keep your business idea at the front of potential investors’ minds. Mail a thank you letter that highlights what you are asking and include a business card magnet (any) to keep your idea and contact info visible. The goal is to get a second meeting.
It is important to be prepared to discuss your business idea in detail and articulately. Research, planning and practice will help. For more information on pitching angel investors, check out our Blue Paper®.
Taulli, Tom. “How Angel Investing Works.” Bloomberg BusinessWeek. N.p., 10 Oct. 2008. Web. 19 Oct. 2012.
Brown, Carolyn M. “How to Meet Angel Investors.” Inc.com. N.p., 20 Sept. 2010. Web. 19 Oct. 2012.
Lavinsky, David. “How Small Businesses Can Get Angel Financing | Small Biz Daily.” How Small Businesses Can Get Angel Financing | Small Biz Daily. N.p., 17 July 2012. Web. 19 Oct. 2012.
“The Perfect Pitch: Making Your Case to Angel Investors.” www.4imprint.com. N.p., 27 Sept. 2012. Web. 19 Oct. 2012.