Asking 100 angel investors what they want to see in a pitch is a sure way to get 100 different answers. Even more frustrating for those trying to raise money is that the advice will conflict. Today”™s investor will recommend adding something that yesterday”™s investor suggesting removing.
The challenge is that the list of what an angel investor needs to understand before making an investment is long. It includes the business model, the product, where the money is coming from, where it is going, who is going to get it there, the exit strategy and many other details that will be specific to the startup.
But as long as the list is, the allotted time to pitch will be short. A pitcher may literally have only 30 seconds. Even the more standard 6 to 12 minutes is not enough time to include everything.
Therefore, the pitch will always be missing information. The good news is: that is okay.
Even though the investor needs to understand everything eventually, nobody will write a check after a six-minute pitch. If the pitch goes well, the investor will want to learn more.
The goal of the pitch, therefore, is not to raise money but simply to secure the next meeting.
There are some truths that will help the content, inspire investors and get that next meeting. At a minimum, a good presentation will describe the market need, the company”™s solution and show how the investor will make money.
Many pitches dwell too long on the product and its functionality at the cost of spending little or no time on why it matters or what the exit strategy is. But that is the opposite of what investors want to see. Investors make money from an exit so they want to know that there is a market and they want to know how and when the exit will happen.
The team is also important. Some idea of who the team is and why they merit investment is crucial. Resumes with lots of experience are a valuable asset.
Presentation style is important as well. Diction, flow, appearance and mannerisms all have an impact on how powerfully a pitch inspires.
Many pitches hit every critical point and go nowhere. Others break every rule and end up fully funded. The difference is inspiration and engagement, choosing the right content to be interesting and delivering it in a way that speaks to the investor.
Despite the litany of requirements, the truth is that angels want a good story they can understand and a team they can believe in. They need to feel, not just understand, how the pieces will come together. The startup should subtly, politely and confidently instill fear of missing out. There is no formula for this other than practice, trial and error and listening to feedback.
If investors approach the presenter afterwards to ask questions and point out the flaws of the presentation, the pitch has worked. The startup is already in the next meeting. Now the presenter has time to hit the points they couldn”™t cover in six minutes ”” likely not enough for a check but potentially enough for a more detailed next meeting.
At some point the startup will need to provide all of the answers. They will need a solid plan and a clear pathway for the angels to make money. Responses to questions will need to be clear and rock solid. But the first step is getting the angels to care enough to ask questions, piquing their interest quickly and working with 100 different perspectives.
Jeff Loehr is a principal consultant at Stratist Consulting in White Plains, a firm that helps businesses of all sizes design strategies, business models and execution plans, and a founding partner of the Westchester Angels, an investment group that brings early-stage investors and startups together. He can be reached at jeff.wbg@stratistconsulting.com.
