By Ed McLaughlin and Wyn Lydecker
Listen up if you are preparing to pitch your startup business to sophisticated angel investors who have access to capital, industry expertise, and substantial relationship networks.
I recently attended the STAR Angel Network’s Fall “Demo Day” Showcase of startups, which was held in partnership with New York City’s flagship technology accelerator, Grand Central Tech. STAR Angel Network is the only network of professional athletes and celebrities committed to finding, funding, and promoting promising early stage companies.
I networked with founders of startups and other angel investors. We listened to funding pitches from some of the city’s finest emerging technology companies. The keynote speaker was Kevin McGovern, founder of over 15 companies, six of which were world and category leaders. One of them was SoBe Beverage, the fastest growing beverage company ever in the US. (It was sold to Pepsi.)
McGovern graciously gave an inside look at 5 success indicators that will stand out to investors and sway them to invest in your company.
5 Indicators of Success that Angel Investors Look For During Your Pitch
- Less is More: – Focus on one idea and put all your energy into it. Whatever will make your product or service distinctively different from current market offerings should be loud and clear.
- Think in Terms of “We” and “Us” – Present yourself as a team player. If you speak in terms of “I” and “They,” it shows that you undervalue the collaborative effort of your team and their body of distinctive competencies. Successful startups have less visible inside people devoted to the inner workings of the company and one or more outside people who are distinctively competent at communicating your company’s vision to funders and potential customers. All founders are equally important.
- Be Risk-Comfortable: Most entrepreneurs have the lurking fear of failure. Show that you have forged ahead with the conviction that business failure doesn’t mean personal failure and that you fully believe in your venture. Show how your calculated risks have rendered success in terms of customers or capital already produced.
- Have a Written Strategy: Have your blueprint clearly laid out. Show that it has factored in foreseeable obstacles and ways to address them. This will show you are able and willing to pivot when circumstances change and that you can tweak your strategy.
- Include Someone Seasoned With Reason: Your team should include someone who has been down the entrepreneurial road before in some way. Show that you have combined the vigor of your vision with the tempering of wisdom.
Angels and private investors receive hundreds of business plans and pitches on a regular basis. On average, angels fund 2.5% of startups they review (Forbes, December 2013). In addition to funding, Angels offer valuable mentoring during the seed stage of the startup. Be prepared, and show them you’re a sure bet!
Ed McLaughlin is currently co-writing the book “The Purpose Is Profit: Secrets of a Successful Entrepreneur from Startup to Exit” with Wyn Lydecker and Paul McLaughlin.
Copyright © 2014 by Ed McLaughlin All rights reserved.