What You Need Before You Go After Angels
Without capital, it’s hard for startups to grow. So, it’s no surprise that in their rush to start fundraising, entrepreneurs leap into the process without getting all of their ducks in a row. Before jumping in head first, take a breath and prepare yourself by making sure you know what investors are looking for so they’ll open their minds and wallets to support your idea.
A Solid Concept
Does everything work? We might be relaying the obvious here, but it’s important for all your technology and data to be accurate and effective. Avoid the Theranos trap, and provide your investors (and future customers) with a company and product that they can rely on.
Once you’re positive all the technology checks out, investors want you to have a sturdy foundation. Ideally, approach them after respected and relevant scientists from your field have offered insight in your startup. Due diligence is a vital aspect of investors’ agenda, so be sure they know the feasibility of your technology has been proven and that you’re ready for commercialization. Most investors aren’t scientist, so an understandable and easy-to-follow pitch deck is also important. For tips on creating a strong pitch, click here.
A Market Niche
Make sure you have a place in a hot market. It’s one thing to have a great invention, it’s another if it’s actually relevant. Most investors in the deep technology sectors are not interested in invention for the sake of innovation. They want global impact. Is the world better off with your invention as a commercialized product? If the answer to that question isn’t “yes,” you’ve already lost their attention. Remember: you aren’t just sharing a cool innovation — you are building a business case with large market potential.
A Plan for the Future
Yes, a positive impact on society is a large factor that angels consider when investing. They want to be a part of change. But that doesn’t mean they’ll invest in a company that lacks a clear path and strategy. In short: know where your company is headed. Draw data and predict the projections of the market. Estimate potential exits and other relevant information for investors. They like to see that you are already in contact or talking to potential partners and customers. Know your company’s strengths and weaknesses, then make sure investors know the strengths outweigh the weaknesses. With that in mind, Angels in the deep technology and science industries understand that your startup is still gaining momentum and in the early stages of producing.
Now, it’s time for you to approach investors. Make sure you check out our previous blog on presenting your pitch deck to make sure you really wow your audience!
For more information on reeling in the investments, check out our Fundraising 101 series at Propel(x).
