Angels Den Blog

The business finance sector has changed beyond all recognition in recent years. Before the introduction of private investo funding, the options available to most small businesses would have been to follow the traditional beg, borrow or steal routes. They could beg their friendly (hmm) local bank manager for a loan, borrow from family or allow a faceless venture capitalist firm to “steal” a very high percentage of their business.

Private investor funding has simplified the process of attaining additional business finance and made it far more accessible to small and fledgling businesses than ever before. Business angels (the gentlemen and ladies with the cash to splash) could literally be anyone, from a successful corporate CEO to an everyday person with a little extra cash and an adventurous spirit. While pitching for corporate finance to a panel of business angels may be far more relaxed than a meeting with your bank manager, it is no less important to plan and execute your pitch in a professional and informed fashion.

To these ends we thought we’d give you a few pointers on what those offering private investor funding will be looking for when they consider risking their hard-earned money with your venture.

Differentiation
A pitch for private investor funding must convey the uniqueness of the opportunity you are offering the business angels in front of you. By the end of your 3 or 4 minutes, you must have convinced them that there is something special about your business, something that differentiates it, if only marginally, from what exists in the market today.

Passion
How passionate are you about your business? Make your zeal for your venture irresistibly contagious and you’ll stand a far batter chance of winning over your business angel audience. If you believe in your product or service, are committed to its success and convey this in your pitch, you are one step closer to your private investor funding.

Sacrifice
Closely aligned to passion are the sacrifices that you have made for your business. How much time and effort have you committed to your venture? How much have you personally invested in getting the business to where it is today? Business angels are looking for individuals who are 100% committed to their business, so present your sacrifices with pride and you’ll be sure to gain their respect.

Expertise
The relevance of your background will play its part in determining whether a business angel decides to invest in your venture. What skills do you have? Where did you previously work? Have you ever run a business before? Now that you’ve already proven your business has merit and you have the gusto to run with it, they will be looking for whether you personally have the ability to launch, develop and grow a business.

Market
Private investor funding is not a bottomless pit of generosity. Some markets are so swamped with competitors that to make any impression you would need to inject vast sums of money into a small business. Equally some ideas are just too far ahead of their time, arriving before their market has matured, and this scenario would also require a business angel to commit more funds than they would wish to. It is important that you know your market and appreciate how it will change over time and with different economic conditions.

Competitors
Are there other firms developing the same idea? How flooded is the market currently? What barriers are there to entry into your market? Business angels are interested in protecting their investments so you should aim to prove that your business model is strong enough to fend off competition and that you have the relevant patents or legal protections to ensure that you will have no direct competitors.

Profit
Ah, finally we come to the main business angel motivator, the reason why private investor funding has been so successful – the desire for profit. It does not matter how innovative your idea is: some are just not destined to make money. You MUST know your figures – what is your turnover and profit? – know your projections for the next couple of years, the cash you have in the bank and what you spend your money on. Business angels are looking to see a return on their investment, and need to be sure that you have a cast iron grip on the finances of the business and know exactly how you are going to turn their funding into profits.

Private investor funding is now available to ANY business or entrepreneur looking to launch a new ventureor any business looking for an investor. So if you would like to find out a little more about pitching to our business angels for funding to launch, develop or boost your business then come to our website at www.angelsden.co.uk.