Blog Archives - Christine Caldwell Coaching

1/14/2020 0 Comments

The "Perfect Pitch" Template: Presenting to Angel Investors

After sitting in on many angel investor pitches with my marketing hat on, the "Perfect Pitch" consists of the following critical elements. Investors are going to ask you about these, anyway, so you might as well have it all ready for them upfront. Check out the 8 Tips for Pitching to Investors below. You'll need them, too.

1. The problem you are solving.
How did you come to know it was a problem? This is a chance to tell the investor about your personal, educational and professional background, along with that of your management team.

2. A clear explanation of the solution.
How does it solve the problem and who is going to buy it? As an early stage startup, investors look for the Minimum Viable Product (MVP) which is defined as a product with enough features to satisfy early customers but allows you to gather feedback for future product development. This can reduce upfront expenditures and minimize risk of failure.

3. Target market size in terms of dollars and number of target buyers.
Include projected market growth rates and the % of target market and buyer you expect to gain.

4. Competitive Landscape and your Differentiators.
Include direct and indirect competitors. Competition isn’t necessarily bad; you just have to identify your particular niche and differentiator(s). A Competitive Matrix comparing features side-by-side is a great visual as is a Perceptual Positioning chart (make sure you are in the upper right quadrant).

5. Value proposition.
What is the Return on Investment (ROI) for the customer? In other words, what are the benefits?

6. Revenue model.
How will you make money? Tip: Recurring Revenue is always great, when applicable.

7. Barriers to entry.
How easy is it for others to do the same thing or for a large company to launch a similar service or product? Include any patents or patents pending that can increase barriers to entry.

8. Current state of startup.
Milestones achieved to-date, traction in market and customers. Even if you are pre-revenue, show progressive milestones with a visual.

9. Go-to-market strategy.
This is not just advertising/promotion but also partners and distribution channels. Also include how you intend to scale the business. Include a plan for social proof. You also will invariably be asked what your customer acquisition cost is.

10. Management Structure and Board of Directors/Advisors
Identify your management team and their experience. State how you Board help you. Naming influential names is not enough.

11. Financial Statements.
Profit & Loss, Balance Sheet (if applicable) and Cash Flow. Develop best, average and conservative scenarios. Present the average one and be prepared to discuss environmental or economic factors that would cause the higher and the lower projections. Know your industry’s Average Gross Margin and Net Profit. Projections should go out at least 3 years and no more than 5.

12. The Ask.
Specify type (equity or convertible note) and the equity stake. Provide your best pre- and post- money valuation estimate (although the investors probably won’t believe you anyway). You will always get asked how much skin you have in the game. An investor typically will not invest if you haven’t. Also, make sure to include Use of Funds in a simplified Pie Chart.

13. Exit Strategy.
The point of this slide is to tell the investor when he/she can expect to receive their ROI. An angel investor is typically looking for an ROI of 30% or more.

14. Contact information.

One last tip: The adage among investors is that they will invest in a mediocre idea with a great management team over a great idea with a mediocre management team. If your management team is not deeply experienced, make sure you have built an influential, knowledgeable and active Board of Directors and/or Advisory Board.

Christine Caldwell is a former Marketing Executive and Business Owner, now on contract to Bridge Angel Investors, as well as mentor to the founders of SECON (a student-driven Social Entrepreneurship Conference and Incubator), marketing consultant and coach, among other fun stuff. More information is at https://www.christinecaldwellcoaching.com/ and she can be reached at chris@christinecaldwellcoaching.com.

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1/14/2020 0 Comments

Eight Tips When Pitching to Angel Investors

Angel Investors can be a tough crowd but don’t let that intimidate you. Working for an angel investors group gave me a firsthand view of what angel investors like to see when entrepreneurs pitch to them. As a former marketing executive, I also know how to craft your messages to a specific audience and, as I said, this is a tough crowd. I’m not saying a pitch presentation alone is going to close the deal. A bad idea isn’t going to get any better with a creative slide layout but by following these 8 tips (and the pitch deck template that is above), you’ll have a fighting chance.

First, let’s get on the same page about angel investing. Angel Investors focus on emerging or early stage startups, those who are pre-revenue or with revenues less than $1million. This means an angel investor is taking on more risk than, say, a venture capitalist when you are on the lower side of the range. There is a leap of faith for most angel investors which is why YOU and your management team play such an important factor.

An angel (sometimes referred to as a seed) round is usually between $25,000 and $500,000 and the angel can be a standalone investor or working as part of an angel network. Angel groups can also "syndicate" so that deals can result in much higher rounds, for example, $2 million. Angels can truly be angels as they are high net worth individuals who have amassed wealth and experience as corporate executives, entrepreneurs or successful investors. As a class of investors, they are eager to leverage their expertise to mentor entrepreneurs to increase the probability of a startup’s success.

So, here we go:
1. You will typically have 20-25 minutes to pitch before Q&A is open to the floor. Practice, practice, practice to stay within that timeframe.

2. Your sole job in 25 minutes is to convince investors they can make money off you and your idea and they don’t know you from Adam.

3. Be able to describe your idea and its value in 30 seconds. Before pitching, tell everyone you know about your product or service. If it takes you more than 30 seconds or they return a blank stare, keep refining and telling everyone again, repeat as often as needed.

4. Don’t waste precious time only to get to the end and rush through the financials. Investors live for the financials and they will have tons of questions to ask you.

5. Speaking of financials, you don’t have to go into infinite detail in the pitch but have the backup to supply and the justification in your head. Provide handouts of the financials.

6. Don’t read a list of bulleted items verbatim from your slide; an investor can do that. Their eyes should be on you. Create visuals when possible. If you do use bullets to support your points, remember the Rule of 3: no more than 3 of them per slide.

7. Listen and don’t think you know everything. Too many entrepreneurs are so eager to prove to investors that they’ve thought of everything they feel a need to counter investor advice with a “we’ve researched that and we found… “. Just say, thank you, we will take that under consideration and mean it.

8. Last, make sure the font size is big enough. You don’t always know the size of the room or the size of the screen. But you do know your average investor is pushing 50 or more. So make the font size 36 or more. Oh, and maintain contrast. No light grey against a white background.

Christine Caldwell is a former Marketing Executive and Business Owner, now on contract to Bridge Angel Investors, as well as mentor to the founders of SECON (a student-driven Social Entrepreneurship Conference and Incubator), marketing consultant and coach, among other fun stuff. More information is at https://www.christinecaldwellcoaching.com/ and she can be reached at chris@christinecaldwellcoaching.com.

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