Clear summary of what your business does
Perhaps the most important thing of all is to clearly explain exactly what your business does and how it intends to make money. Try to include in the first sentence a simple overview of your company and then build on from there, perhaps going on to introduce your various products, target customers and routes to market. Do not use elaborate or highly technical language as it could confuse investors before they have read more than a few lines of your pitch. Images of your products/services are easy to digest and will help to increase investor interest.
When you present a project to business angels, more than the project itself, you as an entrepreneur will be judged on your ability to run the project. By posting a presentation video of the director / creator of the project, you will be able to attract more potential investors who will judge your ability to deliver success.
To get some ideas take a look at the pitch videos of some companies that you like, as well as ones that you don’t like. Think about why some videos were better than others and you can then plan your own accordingly. Above all, make it short, eye-catching and informative.
Being able to sell a product is all well and good but investors want to know just how big the market potential is. Figures showing market size and forecast growth are always welcome, but make sure you have a credible source for your figures.
Also try to pinpoint your main competition. You may have an industry disrupting idea or world beating new product but there will always be someone else around to potentially trip you up. Identifying relevant competitors will also show potential investors that you have done your homework on the industry. Compare your product to theirs and explain why you have a competitive advantage.
What you will spend the money on
If investors are giving you their hard earned cash they will want to know what you are going to spend it on, so there is no harm in going into great detail here. If for example you are going to spend 50% of the funds raised on marketing then say exactly what types of marketing you will use and how much you will spend on each.
It is also important to be specific. Try not to use vague terms such as “working capital” as it may put people off if they don’t know exactly you will be spending the money on.
In the long-term your investors will want to realise value on their investment. There are only two ways that this can happen – via a sale of their shares or through distributions such as dividends. For a private company the former is usually achieved by a sale of the business, flotation on a public market or the company buying back its own shares. The dividend policy is entirely at your discretion. Investors will usually be expecting to see a return within 3 to 5 years, so think about how best you plan to realise value within this time period.
|Andrew Adcock of Crowd for Angels suggests, “However you intend to realise value for your investors make it clear which is your preference and perhaps also give a timeframe. For example you might like to say you are targeting an IPO on a public market within the next 3 years or the payment of dividends within 5 years.”|
Team and experience
In early stage businesses management are of great importance. Perhaps even more important than the product or service they are selling. Investors want to see the team behind the company and more importantly they want to know what experience they have in the industry. If you have previously grown and sold a similar business then shout about it. If not then let investors know about your previous (relevant) work experience.