My last post was running a little too long. Here is a short exercise that I have entrepreneurs do to help them understand what drives Angel investors. First, Angels invest their own money. Once they give it to the entrepreneur, it loses all value until the entrepreneur experiences some event that allows them to pay the Angel back.
I have entrepreneurs think about a situation where you just had a successful exit and now would like to take a million or so of the proceeds and do some early stage investments. Now you worked hard for that money and don’t want to squander it. So, you want to make sure that you are making good investments.
Now take a piece of paper and write down the top five things you would like to hear an entrepreneur tell you that would make you take out your checkbook and invest.
Now open up your presentation and look at the first 3-5 slides. How many of your list do you cover? If you are like most people I have done this with, there were few if any. Of course, you might conclude that you wouldn’t invest in yourself, but, more importantly, this shows you that you would develop your presentation differently if you asked potential investors what they think is important before you present.