By Anthony Gellert
Pitching to investors is scary, and your deck isn’t the only thing that will make or break your pitch. Getting an angel investment can be the difference between your company failing and getting the money it needs to become a big success. Presenting to investors is, obviously, the make it or break it moment for you and your company. That’s a lot of pressure. But don’t worry! Here are the 6 do’s and 6 don’ts that will make sure you make the most out of your precious seconds in front of the people that can make your business explode.
1. Pick your angels carefully
You need money, of course, and the thought of limiting your pitches to certain angels probably seems counter-intuitive. However, you don’t have unlimited time. In addition to fundraising, you are still running a business and you can’t afford to miss a step. After all, part of the value of your new company is its head start on the competition, and you don’t want to lose that head start by wasting your time on angel pitches that won’t get you any money.
Your biggest risk with picking the wrong angel targets is a lengthy due diligence process with only a small amount of money at the end of the rainbow. That is why angel clubs offer a better alternative. You pitch once to a large audience. You answer each question once. And, if all goes well, multiple cheques come in. That’s the type of efficiency that you want.
2. Make sure the product/site works
Embarrassing moments regarding the quality of a product or website has happened more than you might think. The product has even failed directly in front of our audience. Please don’t pitch until the product works. You will make the most out of your pitch if your product is fully functional and can impress us.
If your product is internet-based, make sure that your website is running. If it’s a travel site for example, we’re all going to boot up your site and type in “New York City” while we watch your pitch. Make sure the results make sense and support the image that you’re painting in your presentation. Giving a strong impression of you and your company will greatly improve your chances of getting an investment.
3. Start with the pain point
The pain point that your business is solving is the most important thing for us to know, because it shows us that you understand that people want what your business has to offer, and you’re not grasping at straws.
“We have developed a platform to commoditize the aggregate on demand car service capacity of any given city by geolocated ten block regions.”
Bad. We see a lot of pitches and digest a lot of buzz words. Keep it simple! This sentence tells me nothing outside of you memorizing the buzz words that you want associated with your business.
“Don’t you hate when you can’t get a cab right when you really, really need one? Our app solves this problem.”
Good! This tells me exactly what your app is trying to do and what pain point it’s trying to solve, because most people have had exactly that problem. By starting with the pain point that you’re solving, the rest of your pitch will follow one cohesive message, and we will better understand your business.
4. Practice setting up your equipment
I am a member of two of the most active angel groups in New York City, HBS Angels of Greater New York and NY Angels. In both cases, for our entrepreneur meetings, we borrow a conference room from a law firm (big thanks to each of them). The IT support is uncertain since we are not a paying tenant and we are there after hours in some cases.
Wherever you pitch, make sure you have all the different cords and dongles that you could possibly need to connect your computer to a TV monitor. Your chances of getting an investment once your presentation looks unprofessional to the investors is very low. If we all have to crowd around a laptop to see your presentation, it’s over.
5. Leave a lot of time for questions
Every angel has their own opinion as to the key qualities or key issues that define whether or not you and your business are a good investment. Such, you should expect that the question and answer sessions with the angel groups will go on longer than you may think, while each angel follows their own favorite line of questioning. It will take time and occasionally feel redundant, but leaving enough time and answering each series of questions will broaden your potential horizons and give you the best chance of getting an investment from an angel investor.
6. Solidify a long term plan
I know that you are focused on a ton of near term issues (like keeping the lights on), but take a little time before your angel pitches to map out your future, beyond just the hockey stick revenue projections. What products or features or upgrades get rolled out, and when? Which hires are proactive (needed before some big fund raise or rollout) and reactive (likely come after some big fund raise or revenue milestone)?
We ask because rolling everything out and hiring everyone now is fiscal suicide and growing organically off of only your net income will take forever. Showing a long term plan demonstrates to the angel investors that your business has long term growth potential and that you will spend their money wisely.
1. Don’t treat us like a nuisance
Yes, we take up your time, ask follow up questions, ask for information that isn’t already included in your prepared information packet. Yes, it’s time consuming. I know. But others down the line will likely ask for the same information. And a great angel, once they invest in you, can advise you, introduce you to VCs, and help you grow. An angel investor can be the turning point in your business.
But you will never get an angel investment in the first place if you treat angels like nuisances! A mix of respect for the investors and passion for your business is the ideal combination, but one without the other and that angel investment will never come.
2. Don’t lead with the org chart
We’ve all heard it. “I invest in the jockey, not the horse.” But that’s bunk. Ron Turcotte couldn’t have ridden my neighbor’s horse, Pocco, to the Triple Crown. Secretariat had major a role. After all, it’s the jockey that lifts the trophy, but the horse that won it. Your business is more important than the people behind it, and we want to know about it first.
The resume of you and your team is important and should of course be included in your presentation, but it should not be the first slide. Prior stints at Apple or Google or Amazon are certainly impressive. We’re looking for experienced management, since the future is always rocky and uncertain no matter how good the idea. But, your business model matters more, and it should be your opener.
3. No S.A.F.E. notes
I can only speak for the two angel clubs in which I am a member, but S.A.F.E. Notes are a nonstarter. So much so, that the moment they are mentioned in a presentation, the whole room starts ranting at the entrepreneur and stops listening to the presentation. Yes, really. I see it all the time.
4. Don’t puff your resume
We’re already taking a leap of faith in you. This is not a Goldman Sachs interview. Pedigree is not our first priority. We care far more about your business, your business model, and your future plans for the business should you get an investment. As I’ve mentioned before, having a good jockey is nice, but it’s the horse that wins the race.
Exaggerating your credentials is not a way to stand out. It’s lying. Great angel clubs do their homework and they will likely find out. Don’t ruin your chances by cutting corners and being dishonest.
5. Don’t embed a video into your presentation
It never works. Maybe it’s the WiFi in our conference room. Maybe it’s the communal computer we make you use. Maybe it Murphy’s Law. But waiting for a blank slide to load and then watching it crash makes you look low tech, even if the slideshow went off without a hitch a hundred times before.
The worst part is it’s not your fault, but think twice before embedding video into a presentation. The potential advantages it gives you in terms of illustrating what your company does doesn’t outweigh the disadvantage you put yourself at if your slideshow crashes. After all, we’d much rather hear you say what the video would than the video say it. You’re the person I’m investing in, not the people who are in the video.
6. Don’t give up on an angel group
A rejection by an angel investor or group of investors is not final. It just means that at the current iteration of the company, it’s not an investment fit for us. If you end up finding other angels to invest, great. They saw something we didn’t. Agree to disagree. But if you end up pivoting significantly, you should revisit all the angels that rejected you in the past.
Burning bridges is never a good strategy when it comes to investors. Don’t take a rejection by an angel group to be a statement on you as a businessperson. In fact, they could like you a lot but think that an investment in your venture would be unwise at the moment.
Keep these tips in mind as you look to bring on angel investment for your business, and you could be well on your way.
Anthony Gellert, Harvard College AB ’91, Harvard Business School MBA ’97 – Treasurer of HBS Alumni Angels of Greater New York
Anthony is the President and Founder of Livingston Capital Management, an investment partnership based in New York City. Prior to his founding of Livingston Capital, he covered healthcare services and industrial services at Cobalt Capital Management and before that was an analyst at Kingdon Capital Management. Anthony has participated in 13 angel investments over the past year.