After watching several episodes of Shark Tank in the US, (Dragon’s Den if you live in the UK) you might think you know what it takes to pitch to business angels. You’d be wrong. While some of the lessons you might gather from the show can be useful, you have to keep in mind that these shows tend to be overdramatized. In the real world, business angels are wholly different than what you see on screen. To get ready to hit the real world fundraising circuit, here are the 10 commandments of pitching to business angels. Keep these in mind while you are crafting your pitch -- but break them at your own (funding round) peril.
I. Thou shalt know thy audience like the backeth of thy hand
Don’t waste your time pitching to angels who don’t invest in your space. Research the group and the individuals before you approach them, then tailor your to pitch to who will be there.
II. Thou shalt tell thy story
While numbers are nice, it’s more important to make them care. The best way is with a compelling story highlighted by numbers.
III. Thou shalt praise thy team
A company is more than the CEO / founder, it’s a team. Your angel investors want to meet your team. They want to know why your team is the best at executing the plan. Bring at least one other team member to the pitch meeting so your top talent can bask in the light.
VI. Thou shalt show an uncanny understanding of thy target market
Understanding how big your addressable market is not as important as knowing who your customers are in your target market. Things like what they eat for breakfast (strawberry jam on toast), the type of shoes they wear to work (new balance), and their spending habits in your product category. Demonstrate that you know everything about your customers.
V. Thou shalt show and tell
If you have a product, show them. Don’t make the mistake of not bringing a demo because this is the time to show it off. You will not be forgiven for this one.
VI. Thou shalt not read from thy pitch deck
First, you shouldn’t have too many words on your slides. Images / graphs / charts are better at telling the story. Second, you need to be prepared and reading verbatim off of your presentation could shows either a lack of preparation or nervousness. Both are not good signs. If you get nervous, can someone else do the pitch? If not, public speaking is an art and as a future business leader you will need to master it. Learn it now before you pitch and it will pay off immensely later.
VII. Thou shalt know exactly how much money thou need and what thou will do with it
Don’t ask for money for the sake of it, instead know exactly how much you need and where it will be spent. Then buffer in an amount for contingency purposes. Things don’t always go as planned. Angels get this and they want to know that you understand this as well.
VIII. Thou shalt respect the definitive nature of thy time slot
Going over your time shows you can’t prepare or manage. That’s a bold statement but it’s true. If you are given ten minutes, take 10 minutes exactly. You don’t need to roll off every single specific detail in your allotted time, you can save some good fodder for responding to questions.
IX. Thou shalt dress like the king / queen of thy land
We can’t all be Mark Zuckerberg rolling around in our pyjamas. Dressing well shows you take yourself very seriously, so keep in mind that it is better to be overdressed than under.
X. Thou shalt always have an exit plan
Once you’ve got them hooked on your story, show them what it is your product does. Show them how great your team is and what you are going to do with the money you raise. You need to be very clear about how the angels are going to make their money.
Angels choose to invest for a number of reasons so while I can't promise that following the 10 commandments will lead to receiving investment, I can say that you won't be written off as someone unrelated to your industry.
You got any other tips for pitching angels?