Our latest blog gives entrepreneurs some hints and tips about how to excite angel investors and communicate with them through your plans and pitches; if you are successful in being selected to pitch.
Scroll down to find out how to seek investment from DBA.
Problems and solutions
You have a limited amount of time to pitch your business to your audience, so it is important that your pitch starts with a clear and straightforward explanation of what your business does. In this way, your audience is engaged from the get-go and not left trying to comprehend the intricacies of your product and/or service.
It sounds obvious doesn’t it, but entrepreneurs must appreciate that the audience they are pitching to may have varying levels of understanding and experience of your industry or sector. For example, as an angel group, Dorset Business Angels don’t specialise in one sector. We welcome pitches from all sectors. Our investors come from varied backgrounds, united in a common cause to support early-stage businesses.
So, articulate the problem and then explain clearly how your solution solves it. This is critical, because if the investor doesn’t quickly understand what your business is about, the rest of the pitch may be a waste of time.
Our Chairman Don McQueen comments,
Some of the best pitches come from founders who worked in a big corporate and identified something the corporate wasn’t doing that their customers wanted. Then they moved to fill that gap and solve the problem through creating their own business. Founders then come to us with a business plan around a real problem they are solving, demonstrating they understand the industry enough to be investable – now that’s exciting!
Explain your business model
In simple terms, your business model should explain to investors how you are going to make and grow profit. Angels are looking for information about your team, your product, your route to market, the technology, the market opportunity*, scalability, and the revenue opportunity.
*Angel Investor Christopher Mirabile sums it up well as follows,
The key to growing a company is finding a big enough market of willing buyers who can be accessed in an affordable way (relative to their lifetime value). The product may be good, and there may be lots of people who might buy it, but unfortunately a company’s true market is limited to those customers for whom that purchase is a top pain point and a top buying priority.
Running a different race
You’ve done your competitor research now share it with your audience. Angel investors want to know who else is operating in the market and how your business differs. This is your chance to share your vision for your business, reinforce your USP and explain how you will sit apart from your competitors to ‘run your own race’.
Angels want to know what expertise you have in your team, and they want to feel the passion you have for your business. From backers and advisors to experts and operators, the key people you have with you are important, as are their credentials. Someone you are pitching to at that very moment may well become a future team member so it’s important to demonstrate the competency and credibility of who is supporting you, and driving the business forward.
Money, money, money
Within angel groups, detailed financial information is usually only shared with those who have expressed an interest, but to engender that interest a potential investor must be provided with a high-level overview of the business’s financials, usually a P&L.
For example, at DBA pitch events, the investors in the room have only seen a short ‘teaser’ of information about your business prior to the pitch event. They will not be privy to the financial information you have submitted in your application to pitch.
To get money from investors, you need to give a clear, detailed explanation of the use of funds to win investors’ interest.
To excite an investor, you must show the journey you’ve been on by identifying milestones of what you have already achieved and the milestones you have identified for the future.
This isn’t Dragons Den – you won’t get investment on the evening! An angel who can visualise themselves on that journey with you is most likely to want to know more through further meetings with you. This is what leads to financial investment.
Most pitches to angel investors are a maximum of 10 minutes, clearly, there is a lot of information to get through! Our top tips:
- Focus on the essential messages. There is always time in the Q&A to delve deeper and answer questions.
- Investors are looking for a unique idea, so clearly define what this is and the problem it solves.
- Let your passion shine through.
- Do your homework before you come to pitch. There is a huge amount of support to be accessed, check out UKBAA, the British Business Bank and our own Entrepreneur Resources
Send us your business proposition