My last blog on first impressions matter focused on the Gust platform application process that most angel groups use. After loading information on Gust, you will receive a pre-screening call. With some Angel groups there is a presentation involved in the process. I have previously discussed the components of making a good pitch and here. However, in preparing your pre-screening or screening presentation there are a number of important elements upon which to focus.
Entrepreneurs first need to understand each Angel group’s process. For example, how they make decisions and how much money is provided per round is essential. However, of key importance is discovering your chief advocate in the Angel group. Remember that in most Angel groups, this is a competition with only one or two winners.
When making your presentation, always focus on the whole story of your company, from value proposition to target market and product market fit. Investors will also want to know whether there is a large market and a great, pressing need for your business or innovation and if you have evidence of good progress in establishing your business. There are other things Angels will be looking for:
Does your plan provide an exit and a reasonable return on investment?
Do you understand the industry and how your competitors fit in the marketplace? Do you know their strengths and weaknesses? Who are their customers and why do they buy from your competition? Why will customers buy from you instead? Have you delighted your current customers?
How will you use the funds? Do the funds you seek match your plans to scale the business? What will you do if our group is unable to complete the funding round with sufficient cash? Do you have a sound plan for the future? How do you currently make money?
Is there anything that might raise a red flag? Is there any criminal record or bankruptcies on the senior team? Any pending litigation against the company or key players? Are any of the co-founders in a personal relationship? Disclose early and don’t be afraid that these issues are deal killers. They are not necessarily. Disclosing the warts early only strengthen your position as an honest person and leader. Failure to disclose can and would likely be a deal killer.
While you present investors are watching to see whether you have the moxie to be an effective leader and have the ability to execute on your plan. This usually comes up during the question and answer time. Angels want to see how you respond to questions, how articulate you are in your response to posed questions, and how well you understand the ability to scale your business. Another principal concern Angels may have is whether the rest of your team is flexible and adaptable to changing market conditions. It’s your job to demonstrate that by showing their experience, savvy, and ability to engaged under changing conditions.
Tell your story engaging all of your pitch points. Using a customer’s point of view, talk about your company with a script format. Prepare it like the screenplay for a movie. One colleague of mine used the story arc ABDCE:
- Set the Action
- Build the Background – this is the setup
- Climax – Why you are a winner (in the movies, the end of the second act)
Remember, this is showtime! Show energy and enthusiasm.