Go inside the mind of an angel investor (and learn how NOT to impress one)
Attracting the attention (and support) of angel investors can seem like one of the great enigmas of startup fundraising. What are they looking for? What separates the businesses they champion from the ones they turn away? And how do you make sure an angel investor is truly the right fit for you and your business?
Nicola Corzine, a seasoned early-stage investor and Executive Director of the Nasdaq Entrepreneurial Center, has seen it all when it comes to hearing pitches from hopeful entrepreneurs. Here, she shares her tips on what NOT to say if you’re trying to impress an angel investor:
“Our numbers are conservative.”
Even if you’re playing it safe, don’t announce this to angel investors. It raises two red flags: Why aren’t you just sharing the most accurate numbers? And why would you undervalue yourself?
“Here’s our 10-year financial plan.”
Particularly in the early stages of a startup, year 7 or 10 isn’t really what’s critical for you. Tomorrow is. You can’t control the market, you don’t know the dynamics, you don’t know who your new competitors will be, and you can’t predict their next year.
“We have no competitors.”
This simply isn’t true. Everyone has a competitor. And saying you don’t will suggest to angel investors that you haven’t done your homework.
“Our valuation is cheap right now.”
So you’re giving me a good deal because … you like me? Again, valuation is one of those numbers that’s subject to change based on forces outside your control. Don’t promise the moon.
“The market is just about to take off.”
If you have to talk about the market taking off, that’s a warning sign that it might never. Talk about what is relevant in the here and now — that’s what angel investors are basing their decisions on.
“All we need is 1% of the market share.”
Everyone claims they’re basing this on a random study and a top-down approach they use with a $1 billion market cap. This raises an obvious flag: “So let me get this straight. You’ve got a sales strategy to hunt down and acquire 10 –100 million in your first three years?” The numbers simply don’t add up. Instead, use a more realistic bottom-up approach.
Interested in learning more about how to own the room when you pitch to early-stage investors? You’ll get a chance to learn from one of the experts, Jason Johnson, a veteran Silicon Valley technologist and entrepreneur who is currently the CEO of August. We invite you to attend a free workshop hosted by Nicola at the Nasdaq Entrepreneurial Center on Wednesday, January 27th for entrepreneurs who are considering raising their first round of capital.
During this 60-minute talk — followed by a 30-minute “ask anything” office hour session — we’ll delve Inside the Mind of an Angel Investor with Jason and Nicola, and give you a chance to get your questions answered.
Inside the Mind of an Angel Investor: Investment Optionality Series
Wednesday, January 27th from 9:30 AM to 11:00 AM (PST)
505 Howard St., San Francisco, CA Learn More/Register
This session is complimentary, but space is limited — please register to reserve a spot. We look forward to seeing you @theCenter.
As Executive Director, Nicola Corzine brings over 15 years of strategic business development and entrepreneurial thought-leadership programming experience to the Nasdaq Entrepreneurial Center. Ms. Corzine was previously a Partner at Band of Angels, Silicon Valley’s oldest seed funding organization, and was Executive Director at Financing Partners, where she was responsible for creating program curriculum for entrepreneurs and investors in Silicon Valley, including investor forums and workshops.
The Nasdaq Entrepreneurial Center is a San Francisco-based non-profit that provides aspiring and current entrepreneurs with access to quality resources, including mentors, training, and networking.
January 21, 2016