Steps To Success


By Ed McLaughlin and Wyn Lydecker

Even though I am not a big believer in the two-minute funding pitch, I have come to learn that it does serve a purpose in culling and sorting potential angel investments. Once I have selected my investment targets, the real opportunity to build a bridge between entrepreneur and investor takes place.

I call this meeting the 7-Step Angel Funding Process. Besides assessing the entrepreneur’s willingness to make the sacrifice for success, I ask each entrepreneur to conform their presentations to the three-hour agenda outlined below. I believe this approach enables the investor and the entrepreneur to drop their guard and jointly assess the genuine potential for working together.

Here is the letter and the agenda I send to each entrepreneur in advance of our meeting:

Hi Entrepreneur,

The purpose of this 3-hour meeting is to learn about your product, assess your business model, determine product/business viability, and quantify cash/investment needs to become profitable.

I want to be very clear upfront that I have agreed to meet to give you my best advice on The Way Forward. I will be very reluctant to participate if I believe that it is a visionary business without a clear plan to become profitable quickly. You may need visionary venture capital investors not angels. That being said, I would like to plan our time as follows:

Step #1: Brief Introductions – 10 Minutes

Step #2: Evolution of Concept – 20 Minutes

  • How did you come up with the Idea?
  • Write-up a concise description of the Business Opportunity
  • Who is the Ideal Customer?
  • What is the Size of the Market?
  • Generate a Business Evolution Timeline – Accomplishments & Challenges
  • What are your “Top 3” obstacles?
  • Who is your Competition?

Step #3: Product Viability – 15 Minutes

  • Do you have any Customers?
  • Who was your 1st Paying Customer?
  • How many Paying Customers do you have?
  • How many Customers pay Full Price?

Step #4: Product Demonstration/Discussion – 30 Minutes

  • How does your product work?
  • What is your Value Proposition?
  • Is your Value Proposition Compelling?
  • Does your Product redefine the way your Customer succeeds?
  • Does your Customer believe that it helps them succeed?

Step #5: Business Model – 45 Minutes

  • How do you make money?
  • What are your sources of revenue?
  • What are your primary expenses?
  • How much have you already invested/spent – Please quantify it
  • How long will it take to reach breakeven?
  • Present current financials

Step #6: Realistic Discussion & Strategy for the Way Forward – 30 Minutes

  • How much Money do you really need to achieve Breakeven?
  • What are your Ideal Sources for Investment?
  • Generate a List of Potential Investment Partners
  • Can you Partner with Complementary Businesses to realize your Vision?
  • Can you Partner with Competitors to realize your Business Vision?
  • Generate a List of Complementary Businesses
  • Generate a List of Competitors?

Step #7: Tough Questions – 30 Minutes

  • Can you implement the Plan?
  • Are you being Realistic?
  • Do you have the Stomach for it?
  • Are you willing to make the Sacrifice?
  • Is it Worth the Risk?
  • What are your Next Steps?

Please prepare this material in advance and confirm your agreement to meet.

Best, Ed


Ed McLaughlin is currently co-writing the book, The Purpose Is Profit: The Truth about Starting and Building Your Own Business, with Wyn Lydecker and Paul McLaughlin.

They are currently offering a complimentary eCopy of The Startup Roadmap: 21 Steps to Profitability here.

Copyright © 2015 by Ed McLaughlin All rights reserved.