What Every Angel Investor Wants You to Know (Part 1)

If You Want Me to Invest in You, Get to Know Me First

By guest author Brian S. Cohen

[This is the first in a four-part series of excerpts from Brian S. Cohen and John Kador’s forthcoming book, which is available for pre-order on Amazon.]

If you want me to invest, it really improves your chances if you do your homework and arrange to get an introduction to me by someone I respect. If you can’t do that, the ideal way to get my attention is to approach me at an investing symposium, business plan competition, or other speaking venue where I have my investing hat on.I am amazed how many emails or calls I get from entrepreneurs who want me to invest in their startups but have not taken any effort to find out the most basic information about me. If founders haven’t done this basic homework before calling me, I have to believe they will be just as lazy when it comes to calling prospects or customers.

Once you have my attention, I need to hear a few key things right up front.

The Elevator Pitch. The first thing I generally want to hear is your elevator pitch. A short, well-crafted explanation of the problem you solve, how you solve it, and how big a market there is for that solution. Remember, your elevator pitch isn’t a sales pitch. You don’t need to “sell” me on anything and please don’t ask me to sit through a demo.

There’s an art and science to perfecting the elevator pitch. If you’re struggling to come up with a memorable elevator pitch, here’s a suggestion. Consider the most fundamental problems your product or service solves. Then create a short one-sentence statement for each. Don’t sweat the wording just now. Just talk them out as if you were talking to your best friend.

Show Me Some Chutzpah. If you are not ready to approach an approachable guy like me, how on earth are you going to get meetings with the customers, suppliers, and partners that are essential to your business success? If you can’t muster the assertiveness to get through an angel investor’s relatively open door, how are you going to persuade impatient prospects to give you the time of day, or journalists to cover your launch, or valuable employees to join your fledgling startup?

Tell Me What You Want?  Not generally, not a year from now, but what, specifically, do you want to happen as a result of meeting with me? It’s critical that you get this part right. I’m not going to fund your startup based on our initial meeting, so if that’s your goal, prepare to be disappointed. In fact, the only reasonable outcome of our first meeting is for me to agree to a second meeting or to recommend you to the New York Angels for screening.

Whet My Curiosity. I’m a curious guy. I don’t know a single active angel investor who isn’t. Try to intrigue me. Mention a hobby of yours or a recent international travel experience or a fun fact about yourself or anything you think might interest me. If you begin the conversation by doing some homework and making those linkages, you’re going to find yourself on a much more effective path. Even if I don’t invest in you, the path will be more pleasant for both of us. In short, make it fun.

The Single Best Question to Ask Me. Founders ask me all kinds of questions, from savvy to silly. But you want to know the best question I have ever been asked by a founder? Here it is: “What excites you about my business?”

That’s a question that really gives me a kick. It totally connects with me as a high-touch investor who invests by the thrill I get down my spine. When I see a smart entrepreneur truly thinking about what they’re doing in a captivating way, it’s easy for me to share the entrepreneur’s excitement. Yes, a question like this puts me on the spot, but it’s fair for an angel to be put on the spot. The most precious commodity a founder has is time. Don’t let me waste a minute of it.

That question gets my juices flowing because now I really have to articulate what is it that I really think, what possibilities I envision, what opportunities I can help create by investing. It bring me into your world it forces me to understand what you’re trying to do. All of a sudden, I’m speaking on your behalf. It’s so much more than “please, give me a check.” It’s “I appreciate what you, Brian, can bring to my startup; I value it, and I don’t want to waste your time if there is not a good match here.”

Brian S. Cohen is chairman of the New York Angels and the author of What Every Angel Investor Wants You to Know: An Insider Reveals How To Get Smart Funding For Your Billion-Dollar Idea (with John Kador, McGraw-Hill), from which this post is adapted. Cohen is the first investor in Pinterest. Over the past decade, he estimates he has considered more than 1,000 pitches for startups. More information about the book at www.getfundedbyangels.com

This segment is part 1 in the series : What Every Angel Investor Wants You to Know
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