The Basic Elements of the Angel Investor Pitch

by | Jun 6, 2010

Angel investors regularly hear pitches from local entrepreneurs who need money for their growing startups. Unfortunately, too many entrepreneurs don’t succeed in their first meeting with potential investors.

How can you be more successful with your fundraising efforts?

Forget your fancy PowerPoint slides, dynamite demo and tremendous track record.

If you can’t tell a simple and compelling story about your business, you won’t get past first base with an investor.

Surprisingly, many entrepreneurs don’t tell a story that includes the simple answers the key questions that investors need to answer first. And most startup CEOs don’t do this well — even though the basic elements of a compelling investor pitch are freely available and have been common practice for years.

Every angel investor (or VC) needs to hear your answer to these basic questions to consider investing in your company. Miss one of these key elements and your story is incomplete.

The basic angel investor pitch

1. Introduction

  • What exactly does your company do?
  • What is the key value proposition?
  • What big change (disruption) will you create in the world?

2. Problem/Opportunity

  • What is the problem you are going to solve?
  • For whom will you solve this problem?
  • How big and urgent is this problem for this market?

3. Product/Solution

  • What specifically is the product or service?
  • How does it address the market problem?
  • What is the current stage of development?

4. Technology

  • What the secret sauce technology or unique delivery approach?
  • How is this defensible?

5. Competitive Advantage

  • What are the key market segments and current competitors?
  • How are you different and better than competitors?
  • In which segment of the market can you be the leader?

6. Business Model

  • How do you make money?
  • Is this a common or new model in your industry?

7. Go To Market

  • How will you build awareness and grow sales?
  • What traction do you have so far with customers?

8.  Unit Economics

  • What does a single sale look like to a typical customer?
  • What are the ASP, CAC and likely LTV from a typical customer?
  • Why will that customer stay a long time and buy more?

9. Financials

  • What does it look like when you sell many of those single customers?
  • Expected (pro forma) revenues, expenses, profits/losses for 5 years
  • What are the key factors that drive this business?

10. Company Status

  • Current number of customers, employees
  • History, accomplishments and status

11. Team

  • What is the background and story of the CEO?
  • Who are the key employees and advisors?

12. Investment

  • How much money are you raising at what valuation?
  • How are you planning to spend this money?
  • What are some likely exit scenarios?

This isn’t a revolutionary approach. This is the simple form of the standard investor pitch that has been been used for years.

Is there just one way to tell the story? Of course not. Only eleven slides allowed? Every investor and every startup is different, so make the adjustments that make sense. Also, a great presentation won’t make up make up for a mediocre CEO.

Your basic startup story gets you in the game with investors. Your selling skills, your knowledge of the business and several other factors get across the finish line to raise money.

It isn’t easy, so don’t avoid the fundamentals of your startup pitch.

Popular investor pitch resources