As any entrepreneur knows, having support from angel investors in the early days can make all the difference when it comes to the success, or failure, of a startup company. It’s a boost just to know that someone has faith in you, as a person, and your idea – but real cash means you can really get started, whether that money is put toward concept development, engineers or gaining user traction.
But what is it that helps you get that investment in the first place? Company Check recently carried out a survey with 3,000 UK business leaders to find out what they think an investor cares most about when deciding whether to back a company. Their answer? Two-thirds of respondents (38 percent) thought the business plan was the most important factor in any investor’s decision to back a company; above any previous sales (27 percent), the founder (15 percent), the idea (9 percent), or the economy (8 percent).
When we asked a group of successful angel investors the same question, they said that they would take into account the personality and experience of the entrepreneur over the business plan. As you can see, their responses were very different to that of the business owner looking for investment.
Shows like “The Apprentice” and “Dragons’ Den” align more closely with the views of the expert investors than with the business leaders in the above survey. In “The Apprentice” for example, the emphasis is on the characters week-on-week, and it’s only in the final episode where we get to hear the detail of their business plan. Equally in “Dragons’ Den,” there have been times when the investors have said, “I’m out,” because they think they’d struggle working with the entrepreneur.
Related: Simplify Your Pitch Deck Message
If you present yourself with confidence when pitching your business, you’re already halfway there. The idea has to be a good one, but investors can help you improve once on board, sharing their knowledge. So how do you make sure you come across well in your pitch, and secure the angel investors you want? Here are my top four tips:
Have your pitch nailed down tight. You should be able to explain it in one minute and then go into the details afterward. Experienced angel investors have heard hundreds of pitches and most can judge very quickly whether they like the idea, if it fits in with their portfolio goals and if it has a chance of success. Remember: investors hear hundreds of pitches, and yours is just another one. Be prepared for rejection, but ask questions and treat it as a learning experience.
Open with a story
There’s evidence to support the notion that pitches can be improved with storytelling, so open up and share something personal with investors. Why are you doing this, what led you to the conclusion that this idea is smarter than others, what does it mean to you and why do you think it can scale? This will help you connect with investors and add a human angle to the business rationale.
Your pitch needs to be smooth and practiced, so run through it with friends and peers, know the objections and have logical answers for them. Face the hard questions first and the rest are easier.
Pitching is serious business, but that doesn’t mean you can’t stray from your story in order to share an anecdote if it adds a human element to the business and gets the point across as to why your idea is the answer to a problem, even if it is a problem people didn’t know they had. Gauge the investor reaction and use the knowledge you gained from the background research you carried out on the investor before meeting to try and connect with them.