3 critical lessons on raising money from 2 great startups and a few failed ones

A great night of startups for the Westchester Angels

The Westchester Angels had a great evening of startups and investment this week. As our group grows, we become much better at screening, and our meetings become more targeted.

We are also learning a lot about how to pitch companies to angels.

The two startups we screened this round Smallhold and Peel A Way Labs, have exciting businesses in very interesting niches. We look forward to learning more and seeing them grow.

While these two companies did a great job with every round of screening and pitches we learn a bit more about how to work with Angels, here are three lessons from this round:

1. When angel investors tell you what they are looking for, listen. We provide a guide to a good pitch and yet most startups we screen haven’t looked at it. Sometimes we have the opportunity to prescreen pitches and offer feedback. Almost never do the companies incorporate our feedback into their pitches. Listening to feedback is a no-brainer.

2. Investors want to know how you are going to make them money. They don’t care much about the product, or the color of your font, or how pretty your presentation is. They are looking for a return on their investment. If you are raising money, you need to explain how you are going to take investor money and turn it into more money. You need to explain the actions you are going to take and why you expect those to yield results. The numbers matter, present them.

3. Focus matters. Focus is important in strategy always, but this a particularly common challenge for startups. They often want to be everything to everybody, but that is unrealistic. You may pivot, you may have options in the future, but for today focus is key. It is actually okay to focus, fail and pivot, but a scattered approach feels expensive, and it is hard to see how it will deliver results.

And at the end of the day have a great company, great team and compelling niche.

For more thoughts on structuring your pitch, you can download a guide by Bizgyde, here.

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