What Investors Want to Hear: Steps to Getting a Yes
July 21, 2016
Doug Doan, of Angel Investment Group Hivers and Strivers, visited Bunker Labs DC as part of the Summer Accelerator Series. Here’s a breakdown of his advice.
Doug started his session by reviewing the various sources of capital to launch a startup and the implications for taking outside funding.
Then, Doug laid out a baseline for investor expectations. At the top of the list? The potential for a company to grow.
To achieve that, the business must:
1) offer a scalable product or service,
2) have a substantial unfair competitive advantage (that is, what you have that no one else in the market can compete with), and
3) a great team to drive success.
Investors also look for companies that offer the potential to have an early exit via acquisition; giving them an early return on their investment.
Doug left our entrepreneurs with the “Top 10 Insider Tips” to successfully pitch an investor:
10 – Be prepared.
Angel investment is not a charity – these investors are looking for a return on their investment (and time). Be sure to do your research, follow instructions, and rehearse your presentation.
9 – Follow the 10/20/30 rule.
Your pitch deck should have 10 slides, take no more than 20 minutes to present, and use 30 pt. font. Your presentation should be hyper focused on the business opportunity.
8 – Be passionate about your business.
Your first impression will factor into the angels’ decision making. Know what your unfair advantage is and make sure you can communicate it very well.
7 – Know your financials!!
Doug stressed the importance of having a good understanding of the financials. If that’s not your strong suite – find someone to assist you). Be up front about your assumptions, admit what you don’t know, and never fake an answer.
6 – Do: exude confidence. Don’t: display arrogance.
Angels are making an investment in you as much as they are your company. Finding the right tone in your pitch is imperative.
5 – Understand and address your competition.
There is always competition. Be sure you are aware your market and explain what sets your business (product, service, team, etc.) apart.
4 – Define your problem first… then talk about your solution.
Be able to identify your customers, why they need your business, and how you have validated the market.
3 – Discuss your team.
Chances are, if you’re approaching Angels, you’ve got a great group of people who work with you. Be sure to highlight their experience and expertise.
2 – Know what you’d do with their money.
Investors are likely to have some expectations for what you’ll do with their funds. Have a plan in place before you ask.
1 – Have an exit strategy.
Angels typically shy away from ‘lifestyle’ companies. Research some information on who might acquire you, why they would acquire you, and at what point in your development they would. Be sure to keep your valuations reasonable!
This article was originally published on the Bunker Labs Blog