Venture Giants has created a brief guide on what to do when you pitch and meet your investors for the first time.
Success! You have sent over your business plan to an angel investor and will pitch to them. Nerve racking stuff.
This is linked from the original Venture Giants article regarding HORROR MISTAKES
We have compiled a brief how-to guide on meeting and dealing with your investors for the purposes of raising investment.
We understand that it can be a nerve racking experience even for the most experienced entrepreneur. Standing up to the scrutiny in a professional manner will really set you up with the best chance of raising investment in the future.
Meeting an Investor for the first time:
When you pitch for angel investment, sell the business proposition to an angel investor in a format that they understand by speaking their language.
It is important to have a PowerPoint/graphical presentation prepared with key bullet points highlighted which structures your whole pitch.
It is astonishing that some entrepreneurs really believe that they do not need to pitch or create a graphical presentation to investors, because they believe that they have a great product or idea and that should just speak for itself.
After your meeting with an investor
After the pitch, hand the investor a well written one page investment summary tailored for them. This is so that the angel investor can peruse it at their leisure. It also serves to jog their memory.
Handing them your FULL business plan after the initial meeting is not advisable unless the investor has asked for it.
Having a full, well written, well researched business plan with financials is a must, but do not underestimate the real power in short and snappy graphics, with an investment summary.
It is important for you to draft your investment summary ONLY after you have completed a full business plan.
Responding to an investor after your meeting
Our best advice to ALL entrepreneurs is to always understand investors are successful people and most will be running several businesses.
The stress placed on them on a daily basis can be massive and a lot of entrepreneurs, being business people themselves forget this very fundamental fact.
So it is very important for entrepreneurs that are dealing with investors to exercise patience when dealing with investors.
Do not expect an immediate reply to your communication and do not send to much correspondence initially, as this can harm your chances.
This may not be the advice you are looking for – or you may wish to deal do a deal overnight – but we have seen many entrepreneurs lose out on major deals simply because they pushed too hard.
We have also seen entrepreneurs make the mistake of first sending a polite courteous email (GOOD!) and then two days after a slightly more abrupt email demanding a reply (NOT SO GOOD!) and then a few days later a very aggressive email demanding a response.
Angel investing is a human proposition and the results vary drastically from person to person.
Once you have established initial contact with the investor and gained their interest, it is likely that negotiations will move along a lot quicker, but exercise restraint initially.
Emails and communication with your investor
Keep communication concise at the start and always remain professional. We also suggest not sending your business plan in the initial email to an investor as your main aim is to instil confidence in investors by being able to clearly communicate your idea and vision.
It is always a good strategy to package your business as an angel investment opportunity, so tailoring your investment summary to specific investors can be a very effective strategy.
Stand out from the crowd
Angel investors think very differently from entrepreneurs.
Business angels are not used to getting up and talking like entrepreneurs are used to doing every day, and it is important for entrepreneurs to learn how to articulate themselves in ways that business angel investors feel comfortable.
Entrepreneurs must always work towards a bigger picture by taking it slowly, saying less and writing more.
Think how many times you rewrite something, whereas there is no second chance when it comes to talking.
A single inappropriate sentence can turn an investor cold and it is important for entrepreneurs to realise how unforgiving investors can be.
A final note
This guide is not exhaustive, but it is a good start to getting you investor ready. Try to enjoy the capital raising process as much as you can, think of it as a game.
There is so much to learn from each encounter with an investor. Take it slow and bear in mind that each meeting is taking you a step closer to realising your dreams.