The 10 Commandments to Securing Angel Investment

 1. Better the Devil You Know

Ensure that your pitch demonstrates your businesses sustainable competitive advantage in your market place. Show your in-depth knowledge of your own business and the main competitors in your market. An Angel Investor is much more likely to invest in you if you have carefully considered what information they need in order to determine if this is a viable investment and you already have the answers ready for them. It shows foresight, dedication and a good head for business.

This means:

• Presenting potential investors with a comprehensive Business Plan a week in advance of the meeting, showing for example:

An Executive Summary of :

• What the business is 
• The key prospects including turnover and operating profit for current and next 2 years 
• Current position of the business 
• Next key steps 
• Background of the business idea and the business owners 
• Short and long-term Business Objectives and Strategy
• The Products and Services your business provides

Market Place 

• Typical target client and their demographics and psychographics
• Competitors 
• Market Trends 
• Main Suppliers 
• Quality Standards 

Marketing and Sales Strategies showing:

• Position, Pricing and Promotion 
• Sales, Incentives and Metrics 
• Organisation and Management Structure and Key Personnel 

Financials 

• History of Published Accounts 
• History of management accounts 
• Trends and forecasts 
• Revenues, costs, assets and cash flow 
• Sensitivity analysis 
• Risk analysis 
• Financial requirements 
• Any current Loans 

Your Long-term Exit Plan for the Business.

• Is it a family legacy?
• Are you intending to sell it?
• To float on the stock market?

Writing a detailed business plan requires succinct writing skills, clarity of style and in-depth knowledge of your market place.

Here is a link to the profiles of Rockstar mentors who can help you and take the pain out of writing an Investable Business Plan: http://bit.ly/9BLyga 

2. Thou Shalt Always Protect Your Brilliant Idea

• If your business idea comprises an original idea or design, an Angel investor will want to see that you have protected it to prevent your competitors from replicating it. 
• Clearly outline any patents, trade marks and other proprietary measures designed to protect your idea, that are in place or pending. 
• Create a prototype of your product design and organise Beta Testers.
• Although Angels do invest in the embryonic stages of a business they will at least want to see a working model that has been tested in the market. Showing that paying customers are already interested in your business is a big incentive to investors.

3. Thou Shalt Put Your Money Where your Mouth Is 

• As you are asking Angel Investors to invest their own money in you and your business you need to show that you have also invested your own money. This shows that you are serious, passionate and believe that the business will be successful.
• You also need to be very clear exactly how much investment you are looking for and how any investment will be spent within the business. 
• Be warned that most investors do not like to be told that their money will be used as salaries for the management team. After all why should they line your pockets with their money? They want to see that the investment is being put into an area of the business that directly generates revenue. 
• Also be clear about how much equity you are willing to give away for the amount of investment you are seeking.

4. Know Thy Angels

• Research potential investors and ask them ahead of time what type of industry and company they prefer to invest in, how much they would typically invest and what kind of return hey are looking for
• Target those who have invested in businesses that are similar in size, turnover and risk to your own.

5. Know Thy Numbers 

• Be very clear about the current financial position of you business and be able to give realistic financial forecasts for the current year and the following 2 years.
• Take a calculator with you. There is nothing more embarrassing that being asked to calculate a per centage and not being able to come up with the figure in your head. There is no shame in saying you always carry a calculator so that there is absolutely no room for error!
• Be honest and realistic when both discussing the businesses financial projections and when discussing equity.

6. Thou Shalt be a Master Negotiator

• Go into the pitch meeting knowing exactly what your desired outcomes are
• Know your bottom line – how much of your business are you willing to give away in return for the money you require? It may vary depending on the skills and connections of a particular investor and hoe much they can help you in addition to the financial investment
• For helpful negotiation tips, check out our blog post on negotiating here:

7. Thou Shalt have the Patience of a Saint and the Persistence of a True Entrepreneur 

• You may be lucky and find an angel investor the very first time you pitch, but more likely it will be a longer process taking from 3-6 months.
• You will need to be tenacious yet humble, confident yet lacking in ego and thick-skinned yet sensitive.

8. Thou Shalt Leverage Your Network 

• If you are pitching to an Angel who clearly likes your idea but it isn’t quite the right investment for them, ask them if they know any other investors who may be interested.
• If you have a mentor then ask them if they have anyone in their vast network of business people who may be interested in investing in your business. leveraging your mentors little black book is one of the major advantages of learning from a highly successful entrepreneur who has been there and done it and already has fantastic connections.

9. Thou Shalt Heed All Good Advice

• After you have pitched to an investor ask them for feedback. Even if the pitch is successful they could still give you some excellent advice on improving your technique that will stand you in good stead when you pitch to another potential investor at a later date.

10. Thou Shalt Need All the Help Thou Can Get 

• At Rockstar Group we understand that pitching to Angel Investors is one of the most important things you will do in your business. It can be a daunting prospect for many entrepreneurs as there is a great deal of work to do in order to achieve success.
• Through The Rockstar Funding Programme we help you to secure investment by

 i. Helping you prepare your business so that it is ready to successfully pitch to Angel Investors for  funding

 ii. Introducing you to a carefully chosen selection of our registered network of over 100 private investors who are looking for investment opportunities of £50k to £2million. 

• The preparation is carried out over 1-3 Funding mentoring sessions of 4 hours each depending on the time required for your particular business. The 1-2-1 sessions are led by a selection of Rockstar mentors who are highly experienced and successful experts in the relevant fields of Business Plans and Finance. Each session is £500.
• All our existing mentees, clients who are already enrolled on one of our mentoring programmes, can elect to take some of their mentoring sessions as funding sessions and so this service is included in the price of their membership.

For more information about our Funding Programme or to get the answer to any queries you have about Rockstar or about mentoring in general, please call our Wealth Manager, Alma Roux on 07885 489 063 or email her at alma@rockstargroup.co.uk

www.rockstargroup.co.uk

 Laura Hillman Social Media Strategist Speaker and Trainer