What are the most common mistakes when pitching to angel investors?

From experience, angel investors, want see a clear solution to an identified problem/pain point faced by the targeted customers, so a prior study of the market is paramount, as well as clear revenue streams.

"Angel investor" was first used in broadway to refer to wealthy patrons why would fund promising theatrical performances which otherwise might not have taken off. The key is to have a clear understanding of the problem that you are solving, any market research that shows the opportunity set clearly. If possible have first hand observational research into the problem you are solving. Have a clear Ask. If you don't ask, you don't get. Finally, a simple financial plan that outlines use of proceeds is a must. What will you do with the money - a plan to scale the business to the next fund raise is important. I like the simplified Thompson T Plan structure. Where we are?, Where do we want to be?, and How do we get there?

Not acknowledging enough that the Company is still in the discovery process of what is working and what is not. While investors think they like to invest in something concrete, it almost never is - hence being aware of the potential pivots provides the right frame of reference to the investors. It also shows humility, awareness and intelligence on part of Founders.

Talking to investors about your idea, capital raise, next business objective comes with expectations from the investor that you have done your homework to the best of your ability/availability. Investors should ask questions and if they don't it's a red flag. If you don’t know the answer to something don’t get defensive, simply acknowledge the gap and respond to them with an answer later, it’s a great way to stay in touch with them. It is clear when a founder is shallow in their business, market, domain, product, metrics etc. but to get ahead of that in a genuine way, be upfront about your journey and what you need to work on. Lastly, do your homework on the inv., so much time and energy is wasted on the wrong person/firm for your biz.

Lots of startups are using lists that are available online to find potential investors. Some of them do their homework. However many fall short in the execution: - make sure you look up the correct person on linkedin. There are several Christian Busch and people often mix me up with one of the others. Not a good start to a conversation. - Make sure you use the correct name in your mailmerge. - If you personalize, be specific. Don't say something like "I'm impressed by your background" - say "I would love to have you involved because your specific experience with XYZ. - Be specific: if you're raising money, don't say you'd love to have a conversation. Say you're raising money.

I often see pitch decks with no ask which leaves the investor hanging. The valuation piece doesn’t always have to be in the slides as it is something you can negotiate on but certainly how much you are raising and what you need those funds for / runway that provides you.

I see a lot of advice here around having a clear ask for how much you are raising, which is helpful. The correct number for your next raise is the amount of capital that enables the company to hit the appropriate key milestones, with some buffer, based on an agressive but achievable plan. Under-funding and over-funding are equally dangerous but the former creates more risk for the investors as they will likely face having to re-invest (inside round) or get risk getting too diluted (cram-down) if the company is behind schedule. I do not recommend signaling valuation desires - you are going to be negotiating against yourself more often than not.

My sweetspot as an investor is seed and I'm looking for revenue and signed contracts, real traction. If that's not in your deck I assume you don't have any. If you have revenue, brag about it but be honest. Revenue and profits are the only true metrics.

Traction gets investors more convicted about your idea and is important to include on your slides. Whether is revenue, sales pipeline or LOIs you should show investors any signs that customers are interested about your product.

Traction demonstrates an ability to execute and interest in your solution/product. Traction over time = momentum and that is what ultimately de-risks an investment entry point for investors more than engagement on its own. Lines not dots!

I'm sure there are lots of brilliant founders who I never meet because I don't understand their story. Lots of email intros and decks are full of jargon and lack substance. Tell me what problem you're solving, why you're solving it and how. Don't tell me you're revolutionizing the future of X by using AI... Be specific.

To be prepared for questions, you should pitch to at least a dozen of investor you don’t really care about - the more the better. This way you will soon realise the common sticking points and recurring questions so you can tailor your pitch and iterate based on those questions / feedback. You only have a short time to convince investors and you want to get to the critical questions quickly - to do so, you need to cover the common basics and move on.

Pro Tip on Questions. Build an Investor FAQ and drop answers to predicted and new questions you get from investors. Consolidate them and keep them concise so there aren't 4 different answers to the same thing. When you truly get stumped, do not BS - you get more points for an "I don't know" or "haven't figured that out yet, what do you think" thank a long winded attempt to pretend you know what you are talking about.

In business and in life, doing any presentation or even taking a phonecall you have to have a clear perspective about what you need to achieve from that interaction. That includes questions. Personally I recommend replaying the scenario with honesty in advance in your head before the reality. Have at least 3-4 probable questions that you maybe asked for each points that you have raised and general narrative. LEARN the answers and remember be honest and put aside ego.

Do your homework: 1. Talk about your previous deals 2. Understand your numbers 3. Be honest 4. Understand your competition 5. Be flexible with your approach

Run fundraising like an enterprise sales process with a focus on relationship building and pattern recognition. VCs look at 1000+ companies in a year and there are many ways to stand out. Being responsive, accurate, and transparent is table-stakes.

Following up is important but if someone is really interested, you will know early. I think is most important for you to gauge their interest at the end of your pitch to see if it’s worth pursuing this investor or move on.

Investors are constantly being asked to put money toward something. They are ultimately investing in the person driving it, not the deal itself. Follow up is the proof that your the person to invest in.

(1) talking about future state/what the solution will do instead of what the team currently solves/is doing. (2) saying "we think/I think" instead of "the data shows/demonstrates"

When you're in the room, you are the expert in whatever the hell it is you do. Act like it. Demonstrate it. When the golf pro is on the table, the heart surgeon is the expert. When the surgeon is on the green, the golf pro is the expert.