Pitching to Angels?

One of the Angels I work with will not invest in businesses run by an entrepreneur who is a single child (I guess he is going to struggle to find people to investable people in China!). But his reasoning was that single children tend to be spoilt and he likes to back people who have learned to share resources.

Last week I was in Calgary and one of the businesses that I have just got involved with went there to pitch to the Angel group there. The pitching process involves a 10 minute pitch to two sets of investors in two different cities; Calgary and Edmonton. These two groups could not be more different. Calgary was about the numbers, the team and the business. Edmonton was about the technical side of things. I am confident that the company will raise a lot of money, but that most of it will come from Calgary (if not all of it).

The other interesting thing to note is that the investors in Calgary really liked the presentation and commented on how good it was (very pleasing as I helped develop it!). The investors in Edmonton commented on how they did not like the fact that the presentation was so good. They believe that a good presentation hides flaws in the business.

The reason I mention the above is that it makes it very difficult to answer the question, what do angel investors look for?

I am giving a talk next week in Poland about Angel Investing. After the talk, I would be happy to post the presentation on this Blog. The presentation is about what I look for in a proposal. Most Angels will say that they are looking to back three things

1. Management
2. Good Business Model
3. Proven Idea/ concept

That sounds easy enough. But it is too generic. It is rather like saying I like the colour grey (There are hundreds of shades of grey – and some I will hate and some I will really like).

Each and every angel will judge the above factors very differently. So I guess when you are pitching to Angels, find out what they have invested in before and get a feel of why they invested in those companies (talking to Angel groups, it is amazing how few companies ask them “What kind of deals does your network do?” or “What does your network look for?”) And then you need to change each and every presentation slightly to address the different emphasis that different investors may have.

It might be easier for me to do a blog on What Not to say!

18
Oct 2010
POSTED BY
POSTED IN Business Practice General Commentary Investments
DISCUSSION 3 Comments
TAGS

, , , , , ,

  • feddkraft

    does it mean that pitching an angel group (all members of which have their own judging factors) diminishes your chances?

  • http://blog.directededge.com/ Scott Wheeler

    I really appreciate it when investors are super specific on their investment philosophy; I think that's really helpful for entrepreneurs.

    There's an irony in that investors typically (and rightly) ride entrepreneurs about how they're differentiated, but 90% of VC websites look like they copied and pasted from The Standard VC Website Manual. You know, they're looking for high growth potential companies, with excellent management teams where they can add value.

    One of the sites that I've always though (while ugly and less than wonderfully organized) is Bessemer's, for example, they actually go into some detail here about what they like in the SaaS space:

    http://bvp.com/saas/default.aspx

    Of course, in reality almost all of the real business happens via personal intros through respective networks, but when a first time entrepreneur is trying to get the lay of the land, I think it's important for them to see first that investors vary fairly widely, and it also provides some guidance when doing network diving to see who's worth getting an intro to and who's not, probably saving time on both ends. (I could imagine it being an effective meeting screening tool as well — if someone hasn't bothered to read up on specific info that an investor has posted, it's likely that they're doing an inverse spray and pray.)

  • Jerry

    good your information….I like your article