Preparing for angel investment
Entrepreneur Sara Davies tells us what she looks for when assessing investment applications as an angel investor with Gabriel Investors.
Firstly, as part of Gabriel Investors, our approach is to work with businesses that are already trading, we don’t deal with start-ups, only established companies - this minimises risk and allows for more sound investment opportunities to present themselves. This, however could change as Gabriel grows.
When writing an investment proposal you must remember that most Angel Investors are extremely busy people, we simply do not have time to read a 100 page document. So, what your business does, what resources you have, what investment you require and why and where you want the business to go should all be condensed into the first one or two pages. Any questions that may arise from that should then be answered in the supporting evidence within the application. Essentially, I want to know in the first 10 minutes of reading an application exactly what you do, what you require and why.
The document itself has to be clearly segmented and organised so when I need to see company structure or costing strategy, for instance, I can easily refer to that section.
When the time comes to pitch face to face, do not waste this opportunity! This is where you have your potential investor’s undivided attention. I should already have a clear idea of what the business is and where you want it to go, so do not go over the proposal word for word when you are presenting to an investor. This is the time where you must sell yourself and your services or products to me and make me want to invest. This is also a time which gives me the opportunity to fully understand where my role would be within your company– as at Gabriel, it’s not just about money it’s about working together longer-term to achieve your company goals.
You must feel confident in your services and/or products, if you don’t then you won’t get investment, it’s as simple as that. You must also have an excellent grasp of all aspects of the business for instance you may be naturally inclined toward product development and be very comfortable talking about existing products and future ideas but not be financially savvy, an investor will spot this so don’t pretend you are if you are not. If you are aware of what your downfalls or gaps in your knowledge are then source that elsewhere and bring that person to the pitch to answer the questions you may not be able to e.g. your financial adviser. You must have somebody in place that is commercially aware and that has a good grasp on finances – not having that in place could not only potentially lose you the investment but could also cost you your business if you can’t manage its growth.
Another tip when it comes to the pitch is: be prepared. This may sound obvious but ensure you have thought of everything that may be fired at you when it comes to question time, there may still be a curveball question but you should be able to answer it, if you have prepped thoroughly. Read though all of the material you have sent your investor so you can direct them to that section of the proposal if need be.
The sole aim of the pitch is to sell your business to the investor; we must fully understand why you need the investment and why we should invest. A solid pitch will have little or no gaps in information, the speakers will be confident in their manner and communicating style, thus making sure that the investor doesn’t have to ask many questions, leaving little doubt in the investor’s mind that they should go for it.
This was posted in Bdaily's Members' News section by Sara Davies .
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