I”™ve heard countless pitches to angel investors ”“ some really good, some not so good, and some so painfully bad that you”™d want to scream.
Pitches are not business plans. Your pitch won”™t answer every investor question, no matter how much information you attempt to cram in. Instead, your pitch should create interest so investors want to learn more. Well-crafted pitches tell an easy-to-understand and compelling story about the potential to scale a startup for an exit.
A pitch consists of two essential parts: a slide deck (usually a PowerPoint) and your verbal presentation. It”™s essential that the slide deck and verbal are in sync. And, as with any presentation, an effective slide deck enhances but does not distract.
In judging a pitch, all angel groups have the same basic four-step process:
1. Virtual Application: Some angel groups receive hundreds of applications per month. A bad slide deck usually stops the conversation here.
2. Screening: You pitch to angel group”™s screening committees ”“ this is usually done virtually. This will be the first time you need to nail your pitch.
3. Investor Meeting: So far, you made it to the investor meeting despite the fierce competition for pitching slots. You may be pitching either virtually, in person, or both at the same time. Many angel groups hold hybrid investor meetings and record the meeting for members who cannot attend.
4. Due Diligence (DD): Congrats if you made it to DD. That means you nailed your pitch at the investor meeting and have investors wanting to learn more. Fasten your seat belts! This is where investors start to dig in. The process can take weeks or months. While every angel group has its own way of performing DD, rest assured you will be tested.
The following is a list of best practices to help you nail your pitch to angel investors.
Relax: Practice, practice, practice your pitch so you know it really well.
Less Is More: Your slide deck should be simple and easy to understand. A complicated slide deck will distract your audience”™s attention. White spaces, pictures, and bullet points will enhance your slide deck and keep investors focused on your verbal presentation.
Font Size: The font size on your slide deck should be large enough so investors can read it easily. Small fonts waste valuable real estate on your slide deck and will frustrate your audience.
Make a BIG Statement at the Beginning of Your Pitch: A big, bold statement on the first slide immediately grabs your audience”™s attention. Once an investor loses interest, it”™s hard to get them back. For example, one of the groups we invested in had a bold statement that sparked tremendous interest: Loliware: “Advancing the Planet Towards a Plastic-Free Future with Products That Will Disappear.”
It”™s Not About You: Make sure your pitch is based on your audience”™s point of view, not yours! What would you want to hear if you were an investor listening to your pitch?
Always Be Transparent: You must remain transparent at all times. No one knows everything! It”™s OK to say, “I don”™t know. Please let me get back to you.” Remember you are pitching experienced business professionals who know instantly when a startup is not being transparent.
Go to Market Strategy: This critical topic is typically neglected and should be addressed. How are you going to sell your product or platform? And how are you going to potentially contact clients, regardless if you”™re a B2B or B2C startup?
Make Several Slide Decks: Some angel groups allow a four-minute pitch, while others allow a 10-minute pitch or more. Know the time allowed before you pitch and create several versions of your slide deck. Be sure you practice each, so you stay within the time allotment.
Keep It Simple: I can”™t stress this point enough. Keep your pitch simple and easy to understand. Make sure you present your “secret sauce” so all can understand. Many in the audience may not have experience in your industry. Dr. Silvia Mah, managing partner at Stella Impact Capital, said it best when she urged start-ups to “pretend you are giving your pitch to a third-grader.”
Videos: Embed a short and informative video into your slide deck. Angel investors like short-form videos, particularly if the video includes your clients sharing how much they like the startup”™s product or platform.
Anticipate Questions: It”™s a good idea to include an appendix in your slide deck that answers anticipated investor”™s questions.
Practice Will Make You Perfect: To overcome jitters, practice your pitch until it runs through your veins! Practice your pitch out loud repeatedly. Presenting in person is very different than presenting virtually. When you pitch in person, your body language is now part of your pitch!
Look at Your Audience, Not the Slide Deck: If you are pitching in person, try to encourage aggressive listening by glancing into the eyes of individual audience members. An alternative tip is to focus on your audience beyond the last row.
Angel investing is risky, with over 66% investments ending up as failures. To compensate for this risk, angel groups have a process that takes time. You will be asked questions you could never anticipate, challenging your leadership ability and why somebody will accept your startup”™s special sauce in the marketplace. However, this is all done in a respectful and helpful manner.
Business is about people, and angels primarily invest in good teams with the potential to scale. By nailing your pitch, complete with a compelling story to scale for an exit, it is likely that angels will want to continue the conversation, mentor you in areas of your weakness, and make warm introductions on your behalf. We may even write out a check!
Sandy Wollman is managing director of Westchester Angels and a member of the board of directors of Angel Capital Association.
