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What do angel investors look for in a start-up pitch?

angel-investors-pitch

Fundraising is one of the hardest parts of being a founder. Pitching isn’t for everyone. For some, the idea of a 5-minute presentation fills them with dread. For others, talking in front of a group of strangers is a walk in the park. However, being confident isn’t the be-all and end-all of a good pitch, you have to understand exactly who you are pitching to. Knowing what investors want from a pitch is a crucial step in the right direction to securing funds for your startup. Putting yourself in their shoes will help you streamline your pitch and highlight the most important aspects of your business, from an investors point of view. Now, we’ve covered what to include in the perfect pitch deck before, however, the following blog should help answer what angel investors really look for in a start-up pitch:

A dedicated founder

It’s often been said that investors for startups invest in people as much as they do in products and services. Investors want to know whom they’ll be going into business with. Now, this doesn’t mean you have to be over the top with charisma or be the most confident person in the room. A bit of personality will go a long way. However, what’s equally important is that you can show your dedication to your product or service, and a willingness to put yourself on the line for your business. Showcase your commitment to wanting the company to continue to grow, even once you have some stability with investment, as this is often the time when founders could become complacent.

A strong and passionate team 

Similar to the above, we know investors like to invest in and help nurture people within the company, so make sure you have a strong team around you that back up your own determination and drive and want to make the business a success. Highlight their past success, their previous experience and what they bring to the collaborative table. It’s not all about skills and experience mind; you have to make sure the team complements one another. Investors are keen to help coach and guide you and the team, so they must be up for it, and willing to grow! A start-up is only as strong as its core team, so recruit well and let investors know why they’re the right team for the job and for the future. 

A real problem and a unique solution!

The market credibility of your business is rooted in the problem it is solving. In an ideal world, your problem will be something everyone knows about, and your solution will be completely innovative. However, we don’t live in an ideal world and there’s a chance your product and the problem you’re solving is niche. So, if investors aren’t totally aware of the problem you’re solving, provide evidence and data to back yourself up, explaining why this problem is urgent, even if it’s niche. 

A genuine USP

Linked to the problem your solving and the solution you are delivering is the innovation behind them. What differentiates you from your competitors who are also attempting to solve the said problem? Imagine the investor you are pitching to has seen all of your competitors in the past day, how can you stand out? Having a USP that is both innovative and genuinely solves the problems you have identified will be one of the most important parts of your pitch.

A realistic (but hopefully large) market size

Your pitch should be rooted in optimism, passion and realism. Be optimistic about your solution; be passionate about your product or service and be realistic about the market you are serving. A good tip is to split the market size into three segments – the Total Available Market, the Serviceable Available Market and the Serviceable Obtainable Market. Resist the temptation to define your market to be as large as possible, the more specific you are, the more realistic your pitch will be to investors.

A start-up that knows its worth

I’ve watched a great pitch ruined by an extreme over-valuation and whenever I think about it, it’s the first thing that comes to mind about the 5-minute presentation I saw. You should be evaluating your company worth as it is now, don’t value the businesses based solely on future potential and please do not overestimate. Know your worth; find the middle ground between undervaluing and over-valuing yourself. Yes, it’s easier said than done. You want to have a business that looks credible and investible but a sense of realism can go a long way, especially when building a new trusting relationship with an investor.  Being humble and realistic about your company’s worth, but confident and optimistic about your product and where it can go is the sweet spot you should be aiming for.

A consistent theme and visually interesting design

A poorly designed pitch deck can ruin a great pitch. It’s a tough, but true fact. Be consistent with your font type, size, colour scheme, images and illustrations. Avoid comic sans, over-stretched pixelated pictures and too much text on the screen. Your deck should visually represent what you are saying. Use graphs, flow diagrams, graphics, and illustrations to complement the words you’re saying.  Okay, I can hear you saying, “I’m not a graphic designer, I’m a founder. Well, there’s no excuse when tools like Canva exist, which is free and super easy to use and has wonderful templates you can use for your deck. Consultancy’s such as Pitchwork offer bespoke design work for startups looking to give their pitches a competitive edge – we can’t recommend them enough!

Some general tips

  1. Be clear and avoid lengthy exposition.
  2. Do your research on investors.
  3. Be ready for technical questions.
  4. Answer questions directly and honestly.
  5. Deep breathes!
  6. Avoid coffee/caffeine before your first pitch.

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