What Every Angel Investor Wants You to Know (Part 2)

What I’m Looking for in an Entrepreneur

By guest author Brian S. Cohen

[This is the second in a four-part series of excerpts from Brian S. Cohen and John Kador’s forthcoming book, What Every Angel Investor Wants You to Know, which is available on Amazon and at independent bookstores.]

What am I looking for in an entrepreneur? I can answer that question in one word.

You.

Yes, you, the humble entrepreneur, are the single most important element of a potential investment. The entire purpose of your pitch is to convince me that you are the special entrepreneur in whom I feel comfortable investing my money and time.

Let’s face it. Someone is going to have to run your business every day, and it’s not going to be me. It all comes down to you.

So be true to yourself. If you take away just one piece of advice from this chapter, let it be this: understand your absolute responsibility and be the person that makes it all happen.

It’s tempting to try to be the person you imagine investors want you to be. Please don’t succumb. Even if you could get away with it, you’ll have gained nothing. You will exhaust yourself trying to make sense of what everyone expects in a dynamic startup.

Being true to yourself is what leadership requires—to look at the chaos and provide an honest point of view about needs to be done first, second and third. People want to work with leaders who are comfortable with themselves while setting the point of view with clarity and conviction.

Start Presentation with You

You are the first and most important element of the presentation. The focus of the presentation should start and conclude with you. The biggest mistake entrepreneurs make in their pitches is to allow the focus to be shifted from the entrepreneur to the graphs and pretty images on their PowerPoint.

Who is the best presenter in recent business history? Does anyone doubt it’s the late Steve Jobs?

Jobs literally changed the way presentations are inspired, designed, and delivered. Now, I want you to visualize Steve presenting. The iconic image is that of a slim man in a black turtleneck and New Balance athletic shoes all alone on a bare stage, with a huge blank presentation screen. And what’s on the screen when Steve walks in? Initially, nothing. Maybe the iconic Apple logo. Steve wanted all eyes on him and not on the screen. And even when something appeared on the screen, it was rarely more than a headline or a word. Or even better, an image. Apple knew that as important as the announcement of the iPhone or iPad was, the real story was Steve Jobs. Everyone knew Steve was in charge and clearly knew where his company was headed. He became the personification of Apple and its products. You could do worse than aspire to be the personification of your particular brand.

Three Things I Look For

If you show me these three things right away, I’ll listen closely and stick around for the rest of the pitch. If you can’t signal at least two of the three of them in the first 45 seconds, you’ve more than likely lost me.

Integrity comes first. If I am not absolutely, positively persuaded that you—and the startup’s top management team—have a track record of integrity, I will not invest, even if you could guarantee that my investment will absolutely, positively pay off.

As an entrepreneur, you are selling some future good. As an angel, I’m investing in your promise to create and build a business that doesn’t yet exist. That promise becomes, like in a politics, is uniquely tied to your character.

Previous Entrepreneurial Experience means demonstrating that you have actually walked this path before with decent results. Like most angels, I love to invest in serial entrepreneurs. Just to know that you have participated in taking a business from beginning to end is enormously reassuring.

There is simply no substitute to demonstrating that you know what it takes to launch a startup. The ideal outcome is that you can also demonstrate an exit, but that’s not as critical as you may think. Even a failed startup is not a deal-breaker. I want to know that you have walked the walk, faced the fears, and sped forward towards a vision.

Leadership Chemistry is hard to define but always exciting when I see it. Starting a successful business can be a frustrating exercise in team building, where the area of leadership is first tested.

Founders will need to make smart hires to form small, powerful teams with good chemistry. They will then have to coordinate the work of those teams, inspire them to execute flawlessly, and develop a product or service that succeeds in disrupting the existing marketplace, usually in a hostile marketplace populated by organizations with much greater financial resources.

That’s why I want you to convince me you have the leadership and management skills in spades or, lacking that, you can develop it in the near future. Leadership experience that has been tested is the best demonstration you can offer. But I also value other forms of leadership experience. The key for founders is to show that they have previously built a team and successfully executed a complex plan.

This segment is part 2 in the series : What Every Angel Investor Wants You to Know
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