By Richard Sudek
Second of two parts
In the last article I described the terms, process, and different presentations entrepreneurs should have ready to raise money. This article will focus on what to include in the pitch, what angel investors look for in an investment, and how to handle the question-and-answer portion of a pitch. Pitching to investors can raise anxiety because many entrepreneurs think it is their only shot. Think of a pitch as an important opening conversation. If you make a big mistake, such as being arrogant or rude, or have a terrible presentation, it might be your only shot. Often, angel groups will let an entrepreneur pitch a second time after 6-18 months if they have met milestones and shown improvement on traction or the business model.
Let’s start with who should do the presentation. Typically, the chief executive and founder should present. However, it is often wise to bring key members of your management team, such as your CFO, technical person or marketing person. If you are technical, then bring the complementary people. Maybe your marketing person is more polished as a presenter, but he or she is not a founder. A good presentation by the founder is often more effective than a great presentation from the marketing person who is not a founder.
Investors want to see the CEO present. Although you don’t want too many people presenting, it is not a problem if a total of two or at most three present if they have different domain expertise and responsibility. Therefore, the CFO presenting the financials is fine. However, a good CEO should still know the main numbers, such as cost of product, gross profit, revenue and cash flow. Investors want to know the CEO can present to customers in a reasonable fashion. It is important to understand that investors look for passion, leadership, and being genuine. Thus, the most polished presentation without being completely genuine is not your best bet. Sometimes, an entrepreneur will bring in a professional CEO who may not convey the passion as much as the founder. Both my research and my experience in watching over 1,000 screenings say that passion is very important.
Often, an entrepreneur has 12-15…