{"id":332,"date":"2020-10-14T01:20:58","date_gmt":"2020-10-14T01:20:58","guid":{"rendered":"https:\/\/marshallbrain.com\/wordpress\/?page_id=332"},"modified":"2020-10-19T02:25:05","modified_gmt":"2020-10-19T02:25:05","slug":"invest5","status":"publish","type":"page","link":"https:\/\/marshallbrain.com\/invest5","title":{"rendered":"How to Raise Money from Angel Investors and Venture Capitalists – Chapter 6"},"content":{"rendered":"\n

Step 3: Presenting<\/strong>
by Marshall Brain<\/a><\/p>\n\n\n\n

If your application moves forward, your next step will be to make a presentation. In an angel group this will normally happen at a monthly meeting where many of the group members attend and listen to your pitch. Your presentation time might be 10 to 30 minutes long depending on the group. During your presentation you will make your case to the group, explaining to the members why they should be interested in your company and why they should invest.<\/p>\n\n\n\n

In the case of a venture capital fund, you will be assigned to one of the fund’s partners and he will meet with you.<\/p>\n\n\n\n

If you think about it from the investor’s point of view, it is easy to decide what you should talk about in your presentation. The investor has a set of questions like: 1) Does this seem like the kind of company that can grow significantly in a few years? 2) Has this company proven that there is a market (does it have customers and know how to find new ones)? 3) Is this management team going to be able to execute its plan? 4) How do the current financials look, and do the projections seem attainable? 5) When the time comes, does this company have an obvious exit path?<\/p>\n\n\n\n

The investor also has some key check boxes in his\/her head. Is there a massive market here? What is the point of pain in this market that is being addressed? How will the company make money solving the pain? Therefore, you should be able to formulate a statement of this form that summarizes your company’s value proposition:<\/p>\n\n\n\n

X million people experience Y. We intend to become the leading company in relieving their pain by doing Z. In the process we will make $$$.”<\/em><\/p>\n\n\n\n

So, for example, a company might say this: “75 million households in the United States have automatic dishwashers. Homeowners waste 20 minutes per day loading and unloading these machines. Our new D-1000 dishwasher robot will completely eliminate this drudgery and wasted time, making life immeasurably better for homeowners. Our market research shows conclusively that sales in the range of 1 million to 2 million units per year will yield annual revenues averaging $300 million. We intend to become the leading company in the home robotics marketplace with follow-on products that do laundry, clean kitchen counters, scrub toilets and showers and mow the lawn. Annual Sales exceeding $1 billion are possible within 5 years.” If you attach a credible management team to those projections, show how you plan to go public, and have a kick-ass demonstration using a prototype robot, chances are that investors would be interested.<\/p>\n\n\n\n

Your business idea may not be that grandiose, and it may not result in a $1 billion company, and it hopefully is based on a technology that is currently feasible (as I write this, it is not possible to create a reasonably priced robot that loads and unloads a dishwasher), but the general form of the presentation applies. You need to show a large market. You need to show a point of pain, a hole in the marketplace or an opportunity not yet exploited. Then you need to show your solution and how you plan to make money with it. Your presentation should leave the audience with a feeling of inevitability, so that they are thinking something like, “wow, this business idea is awesome and they can’t lose – how has no one else seen this opportunity?!”<\/p>\n\n\n\n

Here are two other examples to help cement this approach into your brain:<\/p>\n\n\n\n