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How to Pitch Angel Investors. By Stephen Van Beaver 01/09/14. Angel Investors. In 2011, 264,000+ active U.S. angel investors In 2011, $21 billion invested in more than 58,000 early stage companies Average investment for each company $362,000
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How to Pitch Angel Investors By Stephen Van Beaver 01/09/14
Angel Investors • In 2011, 264,000+ active U.S. angel investors • In 2011, $21 billion invested in more than 58,000 early stage companies • Average investment for each company $362,000 • By contrast, venture capitalists made 460+ investments (mostly later stage companies) averaging about $7.5 million per company Source: 2011 Boston College Entrepreneurial Center
Finding an Investor • Extensive networking via friends, family, social media, businesses, community, internet, universities, etc. • “Connect” with a potential investor • Via personal/professional relationship • Experience in your industry • Domain expertise • Unique attention grabber
Investor Compatibility • Record of investing in your industry • Investment criteria – size, type, time period • Personal & professional references • Involvement – passive, active, operational
Pitch Preparation • Do not ask other people for money unless you’ve spent your own on this business • Thoroughly vet your pitch beforehand • People experienced in your industry • Targeted customers • Seasoned business people
Pitch Preparation • You’re got 15 minutes so make every word, graph and/or picture count! • 12 – 15 PowerPoint slides • Keep it simple and concise • Be yourself – Do not oversell • Practice, Practice, Practice
Pitch Content • Problem • Solution • Market Size • Competition • Product or Service • Business Model • Team • Financials
Investor’s Initial Questions • Is the business idea simple enough for me to understand and buy into? • Does it solve a problem or meet a need? • Is there a big enough market and customer base for the idea, i.e. viable business model? • Does the entrepreneur have the right people on the team to pull it off?
Common Pitch Mistakes • Don't clearly explain the problem you solve or the need you meet • Too many facts and numbers • Unrealistic sales forecasts • Too attached to your business plan • Lack of conviction
Entrepreneur Qualities Creative Determined Strong people skills Strong work ethic Passionate Primary trait: The ability to evolve! • Disciplined • Confident • Open Minded • Self-Starter • Competitive
“Close” the Pitch • Ask for unanswered questions • Decide on next steps with time frame • Follow-up within a few days