In an attempt to capture an angel investor's interest, you need to get your elevator pitch right. It should address the question of 'where, when, why and how' elements of your business. Now, the trickiest bit is how to cram all this information into a short summary that can be delivered within a given time span, which, by the way, is too short!
So, if you're pitching to an investor, take note of the following mistakes, and avoid them completely!
1. Do not send in your business plan/executive summary unsolicited.
No doubt, investors are busy people. They use their time wisely. Most of them have even confessed that they don't dig through their emails for unsolicited business plans/summaries. Instead, they tend to pay attention to people from their network, or that of a business partner they know.
2. A 50-page business plan is not a wise idea.
Again, investors don't have time to review a 50 plus page business plan. Keep it short and precise. A 2 or 3 page summary will give you an upper hand when it comes to deciding whether or not you are worth their time.
3. Showing up with your team, and only having the CEO speak.
Every member of the team must speak in order for the investor to gauge your suitability. Also, you need to be careful in your delivery because people tend to contradict themselves. Speak one mind, one thing and one goal.
4. Denying your competition.
Every business must face competition, whether direct or indirect. So telling an investor that you don't face competition is an unrealistic statement. It's also a way to show them that you don't understand the market well.
5. Unrealistic projections.
They hate unrealistic projections that can't be justified. They want to put their money in a venture that can grow significantly and is exciting. If you're currently operating at zero revenue today, don't think that you'll convince them about your 10 billion dollar business in 5 years time.
Great tips, right? Check back for Part 2 as I share 5 more tips that will help you put the best foot forward when pitching to potential investors.