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5 Quick Tips on Pitching Angel Investors and Venture Capitalists

Started by Benjamin Yoskovitz · 3 months ago

Lately, I’ve been doing a lot of pitching to investors, including angel investors and venture capitalists. It’s a fact of life when you run a venture-backed startup. It’s one of those things that no one ever tells you about raising money — once you ... Continue reading »

32 comments

  • Robert Dempsey

    6 months ago

    Thank you again for a meaty post Ben. What you say of pitching investors and how to present can easily be extended to any presentation. It's about knowing your audience and delivering accordingly.
    reply
  • Brian Hogg

    6 months ago

    Though I have yet to pitch to investors, I would think that a big alarm bell would be the spending of money on operational costs (wages, leasing office space, etc) verses assets (hardware and other tangible goods that can be sold to liquidate).

    Any tips on how to really key a business idea as an asset in their mind?
    reply
  • Insomnia

    6 months ago

    I think you make a perfect point. Its not always so much as to what your pitching but rather how you pitch it. People are dying to hear a good story and are more willing to back it if its entertaining.
    reply
  • traveler

    6 months ago

    End Strong! starting strong is a must to keep people reading. and ending strong is totally a must to get the business running.
    reply
  • Jason

    6 months ago

    This is the first blog post that I've read on pitching investors, and I have to say you made some great points. It's not easy to get in front of an audience of potential investors and captivate them or get them excited about what you are doing. These days VC's can see through a crap pitch within seconds, so it's imperative to really keep building momentum in the beginning of your pitch.
    reply
  • Joey

    6 months ago

    What a great resource.

    I remember my first company, it was so hard to raise money. We relied on all angels. $5,000 here, $10,000 there, finally, we raised $75,000 and were able to hire someone to do our PR.

    Even though we made barely any money, we generated a lot of press in the media. That press alone got the attention of angel investors with deep pockets. We were then able to raise 1.5 million at a decent valuation.

    I highly recommend learning how to write an effective press release, monitoring the media to discover when they're writing about your industry, and building relationships with reporters so that you get the buzz you deserve.

    Investors love media ... it's kind of a smoking mirrors effect, and it's only one small piece of your sales/marketing pie. It will not make or break you, but it will definitely give you a great edge for raising money.

    Great blog!
    reply
  • MarianaB

    6 months ago

    These are excellent tips. I have been using Raising Capital for Entrepreneurs (ebooks version), which has a lot of the same information but definitely not in an at-a-glance format. I'm printing out this blog entry! :)
    reply
  • John Gillett

    6 months ago

    Thanks for this starter's guide to raising VC from angels. Joeys's comment above regarding creating your own media buzz is an excellent addition to the list. There are a ot of resources available to guide you through the press release compositin and distribution process -- and you'd be amazed what an old-fashioned phone call to a business editor can do for a young company with a good story.
    reply
  • fixOut

    6 months ago

    Are there just five most important or you have another?
    I just practice about 3 of them and still didn't have investors.. :(
    reply
  • Alex W

    6 months ago

    Thanks for these tips. I've been working on a few different projects recently and it's about time to try to Pitch them. I think every owner's problem is over-emphasizing their product for obvious reasons, but it's a good thing to keep in mind.

    New Reader, Alex
    reply
  • Paul

    6 months ago

    Those are a great tip! Keep up the good work.
    reply
  • Sara Olaye

    6 months ago

    Be prepared before you pitch any vc - put yourself in their shoe and think about the risks. Is there really a market for your offering? Research - study - prepare & rehearse, then repeat.
    reply
  • Anthony

    6 months ago

    Excellent blog, I'm so glad I've found this place. As for the post, there's some great advice in there for beginners and some good points to refresh the brains of the pros. I'll be visitng regularly.
    reply
  • Mike at Pacebutler Recycling

    6 months ago

    Hello Ben, thanks for this great post. I've engaged in personal selling before and large audience presentations, and I think it helps to practice a certain level of detachment in your presentation - that delicate play between passion (about the project)and a demeanor of desperation. Your audience can sense the confident attitude and will get the message that although you're truly passionate about your project and would very much like to get them on board, you have plenty of options and it will be their loss if they miss out on this boat. The details in this post about the different stages of the presentation flow are priceless. @Joey's comment about the use of media in raising interest for the project is also very valuable. Thanks.:)
    reply
  • Greg Rollett

    6 months ago

    These were great things to think about. Sometimes we get so caught up in making a super spectacular powerpoint that we forget to tell the true heart melting story. Getting personal goes a long way, even to strangers with big pockets.
    reply
  • Ben Yoskovitz

    6 months ago

    @Brian Hogg: Most of your money IS spent on wages and other operational things, not on assets. Any assets you buy depreciate in value over time and are of little use to the business's value. So I wouldn't worry about that. What you need to focus on is where you'll spend money to EARN money.

    @John Gillett: PR is key. I've written about that before and how startups can generate PR. It's some of the least expensive attention you can get, and do it properly, over time, and you can generate strong results from it.

    @Greg Rollett: I agree. But just remember, super spectacular Powerpoint slides DO make a difference. If you go with boring, overstuffed slides with tons of text and too few visual cues, I don't care HOW great the business is, the investors will turn off their brains.
    reply
  • Eric Shan

    6 months ago

    It is difficult to find angel investors, but a careful exploration of possible locations for prospective angel investors can help. Angel investors are inclined to stay close to university programs due to the high number of fresh business ideas they produce.
    reply
  • James Ray Enthusiast

    6 months ago

    Some really interesting (and not previously seen stuff) here. I'd like to share something that I heard recently that is more about the individual, but I think is interesting.
    A friend of mine had recently read Harmonic Wealth by James Ray and showed me a section because she thought it reminded her of me. That is how it all began. (lol!)
    James Ray said, “If your not growing, you’re dying.” Six simple words that I really needed to hear. I guess it was because I was complaining to my friend that I just wasn't feeling stimulated enough. It wasn't as if I was doing anything "bad" in my life, so I was not sure why I was not feeling right. After learning this idea, I realized that "staying at even par" is not enough. That bad feeling was because by not growing, I was staying in the same place, just plodding along towards my death in a way. Doing nothing has negative consequences. But if I was to start growing, I would be moving my life forward, expanding it into something much more exciting! That’s what living is all about.
    After I finished reading Harmonic Wealth, I realized I needed to commit myself to a lifetime of learning – it did not end when I threw my graduation cap in the air. Check it out for yourself… (Link) By the way, the Spanish classes I singed up for are going great :)
    Here’s the link to the website where I bought the book: harmonicwealth.com/read
    -Harmoic Wealth Enthusiast
    reply
  • jeflin

    5 months ago

    Good points raised. You are right that an impressive presentation can make a huge difference to the survivability of a start-up.
    reply
  • David

    5 months ago

    I think your third point, about not over-emphasizing the product, is the most important one you made. The product is obviously a key issue to the investor, but if you can't convey the important element of the product or concept in a fairly short span of time, you are SUNK.

    And I would add one more point - practice! Try your pitch on family and friends. If they are bored or don't "get it," revise your presentation and try again. Never go to your first investment meeting without being fully prepared. Treating your first meeting as a dry run may be fatal if that was the one person who might have written you a check.
    reply
  • Ben Yoskovitz

    5 months ago

    @David: I agree 100% with you when it comes to practice. It's something I've mentioned a few times in previous posts. And don't just practice alone, in front of a mirror -- get in front of people ... the more you do it, the better you'll get, to the point where you could do the presentation on-the-spot at any given moment.
    reply
  • T. O' Donnell

    5 months ago

    1. A good story
    2. Some images (easier to comprehend than text)
    3. Keep it as short as possible
    4. Repeat important points ...
    5. ... That are about benefits to clients
    6. Slow it down. You're excited, we're tense and fidgety.
    7. Keep it as short as possible
    8. A lot of it will be down to whether they like you or not.

    ... from someone who's never pitched for venture capital in his life :)

    Did you ask your audience later why a pitch _didn't_ work? That could be useful.
    reply
  • Mike @ Credit Card Forum

    5 months ago

    I use to work in VC funding and I want to warn people it's usually not beneficial to pay fees to pitch your idea to so called investors. There's an outfit in Los Angeles that is notorious for this and they charge thousands but rarely ever invest. When they do, they don't even use their own money. Legit angel and VC funding sources won't charge you to hear your idea.
    reply
  • Kristin

    5 months ago

    Those are really good tips; I've often thought about the possibilities of investment opportunities.
    reply
  • Aaron

    5 months ago

    A good point to add would be "Invite them to Lunch" - It's a small investment if you consider what you get in return if they actually "LIKE" you. Having someone with money who actually appreciates you as a person is key in my book.
    reply
  • Leo

    4 months ago

    I found listings of angel investors and venture capitalist groups at www.breadsreet.com and www.investorinspector.com . can somebody recommend other web sites with free listings for angel investors?
    reply
  • Geneva

    4 months ago

    Ben, I would love to get more information from you if you would be willing to talk. Let me know!
    reply
  • Ben Yoskovitz

    3 months ago

    @Geneva: What kind of information are you looking for? My email address is available on this site if you want to reach out.
    reply
  • donnellan

    3 months ago

    I have a million dollar profit project that I am willing to split 50/50 with any full money investor. It entails the minimum purchase of 20 acres (already located) and a five building(warehouse style) improvement upon said land along with road/walkways between afroementioned buildings. We will also need a hard surface parking lot.
    As you can see by the above described, this investment will be 90% used for purchase and property improvement. 10% will be used as working capital.
    I will discuss the financials of this enterprise with any serious angel investor that may decide he/she wants to earn a hugh net, yearly profit!

    You may Email me at:

    John Donnellan
    jjdonnellan@gmail.com
    reply
  • Brian Javeline

    3 months ago

    Your article is perfect, but I think you should have started with this in your opening sentences ... "You want them looking at you, making eye contact, and really getting a feel for your confidence and passion." This was the ending point of your article and it can not be overstated enough. Angel investors are buying into the founders vision-- and confidence, passion along with a clear & methodical presentation. I run MyOnlineToolbox that has raised money (and still is raising) from 5 early stage angels from California, to New Jersey to Britain. I even won a MIT Best Business Idea Presentation Award (without having the best business, just the best PRESENTATION). Ben's overview is excellent. I challenge him to now put this on a YouTube video to see how fast he can project this article within a short presentation just as if he was pitching investors.
    reply
  • Benjamin Yoskovitz

    3 months ago

    Brian - I don't look good on camera *grin* It sounds like it would be fun to put this sort of article on YouTube, although I'd want to take the time to do it right. Maybe, some day...

    Thanks for stopping by and commenting, hope you'll stick around.
    reply
  • saleel

    2 months ago

    excellent post on pitching. iam admired the way you pitch big time investors. keep posting more about your pitching success stories. i feel charged!
    reply

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