Sourcing for adequate funding or getting an investor, is one of the biggest challenges of every entrepreneur. Aside from conventional sources of funding like bank loans, most entrepreneurs seek for willing investors who will put their money on the table for the business.
There’s an interesting story of how HourlyNerd CEO, Rob Biederman received $450,000 funding after emailing billionaire investor Mark Cuban. Biederman got a reply to his email 15 minutes after sending it.
Unfortunately, not all entrepreneurs are that lucky. These days, angel investors know better, and they are not always quick to invest in businesses. Let’s face it: as more angel investors are getting a wind of the sneaky, copy-and-paste pitching tactics of some entrepreneurs, it’s proving more difficult to win their hearts. But never fear! We have three hidden tricks up our sleeves that will make any angel investor say “yes” to your pitch.
- Connect with the emotions
- Let your ideas have legs to stand on
- Enlighten them on the exit strategy
When you stand before a potential investor to make your pitch, the investor is eager to see and feel your passion for your business. How you exude that passion and drive for what your business seeks to achieve in the industry is what will initially attract an angel investor to your business idea.
Passion for something you deeply believe in is something that can’t be faked. You need to be convinced about your mission and how your business is going to change the world before anyone else. Angel investors want to fall in love with your business, but you have to help them do that with your pitch.
Who wouldn’t like a business idea that promises to change the world? But angel investors are more objective than that. They want to know how your business will be able to carry out its promises.
Simply telling your investors that your business idea is the future is not enough. You need to give your business idea some legs to stand on. In other words, you have to let the investors in on your game plan – a detailed one.
What angel investors look for are hardcore facts and data that show that your business will be viable in the market. An angel investor should be able to look at your business idea and have tangible facts and data on how exactly you intend to change the world with your business. A wise angel investor doesn’t work with promises or assumptions. They need the hardcore facts and detailed plan you seek to follow to make it happen.
Just like every consumer, angel investors expect that they get full value for their money. That’s why an effective pitch is sure to have an exit strategy to ease the mind of the investor on how they can get their investment back over time. Investors are more likely to invest in a business that ensures that they will get the full amount they invested and then some as profit.
When LinkedIn bought Newsle, they invested $2.6 million in Newsle. This investment ended up giving LinkedIn a handsome $30 million as return on investment. That’s what an exit strategy seeks to achieve.
When making your pitch, give a clear outline of how soon and maybe even how much investors will be able to get back on their investment. Doing so will give the investors a picture or estimate of how long they will have to wait before their investments yield dividend.
A critical look at the process of acquiring funding from angel investors shows you that angel investors are just as human as you are. They want to make sure that they feel your zeal and passion to make your business a reality. It’s because they know that when the chips are down and the journey is rocky, it’s only a strong will and undying passion that will keep the business afloat.
You can’t blame investors for wanting to have facts to back up their gut feeling that your business will work out. Who doesn’t get overcome by doubt? With the data in their hands they know the path you want to follow and how you seek to achieve your business goals.
And finally, as much as the angel investor loves your business idea, they want to make sure that your business is financially worth their investment. A juicy exit strategy is enough to get any angel investor interested in your business.