Hello Dr. Smith,

Thank you for starting this Discussion; and I greatly enjoyed reading your article.

*** I also want to specially thank you for all the great articles you have been posting in our News Tab – your great content has made our News section valuable reading.

As for “things to remember when presenting to early-stage and angel investors”…. about three years ago I attended a major conference with a panel of Angel & Early Stage Investors, and the keynote speaker made a comment that surprised most of the attendees, myself included. He said:

“This is the last place you should come for funding because it is rare you will get any. And for the firms we provide funding to, over 95% of the money we collectively give is to people we already know. For the remaining 5%, the lucky 5%, the fees we require are far higher than what any bank or credit card charges if you could correctly compare the actual costs.”

Is the above true? (All seven of the expert panelists agreed with the above statement, and like most of the 200 in attendance, I accepted it as fact…. but would like your superior expertise.)

Sell the feeling, not the product.
If you sell yourself, you miss the point of gaining interest, because of the focus.
Take yourself out of the pitch as best possible.
Let the product or idea sell itself. Answer their questions, be patient, think about your reply first. There is no rush, no need to perform.
Your best replies are “Yes”, “No”, and “I don’t know, yet.”

Confidence is like laughter, infectious.
The fact that you are in this position with an angel means its yours to lose now.
No one wastes their time on things they are not interested in.

Be brief, succinct and confident.

As I am not an Angel Investor I cannot quote guidelines. But what I can quote from my years in strategy and market growth (from 0 – $100M in just over 3 years) paying attention to the risks and then putting the plans in place to offset or mitigate the potential bad-news is equally important as ‘selling’ the good news. I’ve found it the best way to 1) get my management to fund the activities and 2) deliver without failure.

Well done. Since I am one of those legacy people in the industry, I always pitch first to those who know me well initially. I am able to discern the gaps that need to be filled in very quickly. It is most important for those that have not traveled this path before to remember that each presentation is a learning experience. Accept the learnings and integrate them into a revised pitch. The pitch and the plan will have a life of its own. Be flexible but be persistent.

I have been involved in 2 such situations. In one, we were dealing with venture capital for a financial services venture. Among several mission-critical issues I posed to the two principals was whether they expected to start from a flat-footed start, ground zero, if you will, or was there any possibility that the investors could provide deal flow. In the first scenario, it could take as long as 18-24 months to reach break-even; in the latter, break-even could be reached as quickly as 12 months. Each scenario obviuously carries significantly different capital requirements. In presenting financial projections, I have always subscribed to a best-probable-worst case trilogy wherein the assumptions for each are accompanied by identified risks to each plan, as well as management’s proposed risk mitigants by which to compete. It is vital that management open their thought processes, conflict resolution, and problem solving approaches to the scrutiny of those who are writing the checks. Their survey of the industy, the comeptitve landscape, regulatory, if any, environment, are examples that cannot be understated.
Finally, the unexpected. In the situation I mentioned earlier, we were assured by a lead investor that they would provide deal flow from the outset. Accordingly, we raised $ 5MM. Subsequently, their executive team decided to withdraw from that commitment, ultimately sinking the enterprise before it really gained traction.

I enjoyed and appreciated your insight as usual. Thank you!