Five Things to Consider When Pitching To Angel Investors
Author - Anthony Gellert (AB '92, MBA '97) - President & Founder of Livingston Capital Management, Treasurer of HBS Alumni Angels of Greater New York
It’s just eight minutes. You have eight minutes to pitch your life’s work, your vision, and your dream. To total strangers. Who will likely see a lot of other pitches on the same day they see yours. Who might be in the middle of eating a meal or texting an angry spouse. And who probably invest only a few times per year.
The quality of your pitch really matters.
Like my colleagues at the Harvard Business School Alumni Angels of Greater New York, I have seen hundreds of pitches in the seven years that I have been an active angel investor. There are clear do's and don’ts.
Here are five things to consider:
First, follow what I call the golden structure of a pitch:
1. Current problem in the world
2. Your solution to that problem
3. The business around your solution (e.g. unit economics, competitors, etc.)
4. The terms of your deal and progress of your fundraise
5. Your team
Of course there are important details that you might add to these sections. Maybe you are a Healthcare startup and you’ve received grants from the government. That goes in section three. Maybe you already have a viable product. The details of that might go in section two. Like a screenshot of your software, a demo, etc. But stick to this structure. This rhythm.
This is how investors listen. These are the empty research receptacles in their head ready to be filled by you. In that golden order. If you stray from this, investors will tune out and just wait for the next pitch.
Second, get the technology of your presentation right.
Does your file properly display on other computers? Or do the graphics short circuit when you use another laptop or a different version of the presentation software? Are you SURE your embedded video will work? In the depths of a strange conference room on a strange laptop? On second thought, you should skip the embedded video. No one will trust you to run a company if you can’t nail down a PowerPoint presentation.
Third, be transparent about everything, starting with your terms.
If you already have some of your round filled, report those terms. If you don’t, tell your audience the terms you have in mind but that they are not set in stone. And you don’t want a 'gotcha' moment during due diligence. Like a person reported as an employee in your pitch deck who really is just a very part-time advisor.
Fourth, stick to the story of your company, not the story of yourself.
You are pitching a startup, not your biography. If you say things like “in my former life” or “I learned a lot” your pitch is off track.
And last, you need to say the word “no” at some point.
No company does everything for every customer. For example, you might get questions asking about long shot markets or unlikely new customers. The answer to some of these questions should be “no, we aren’t targeting that at the moment.”
Entrepreneurs who say “yes” to every question are not being realistic and might be trying to boil the ocean. As an aside, don’t compliment us on our questions. The room will likely have decades of collective investment experience. We don’t need the affirmation. Some questions might be lousy, but most will be on point. A result of a lot of investment scars. “Great questions” is not a great start to any answer.
Finally, congratulations. You’ve begun something very hard. And we are in a room with you because we think what you do matters. We are on your side.
Are you an entrepreneur seeking angel funding? Learn more about how to apply to pitch to the HBS Alumni Angels of Greater New York.