How to present to angel investors

1. How to present a business plan to
investors
Prajakt Raut – co-founder The Hatch for startups

2. Why do angel investors invest in startups?
Expectation of making a profit
Interest in supporting aspiring entrepreneurs
Therefore, your focus should be to convince investors
that your startup is a good investment opportunity

3. How much return on investment do angel
investors seek?
5 - 10x of their investment in a startup….
… because, out of 10 startups they invest in 5-6 will fail, 2-3
may barely return capital, and 1 or 2 may be successful
Therefore, unless you can convince them that your startups will create
value, angel investors will not be interested
For angel investors, profitability is not THE KEY criteria, because they
are not keen on a „dividend‟ play – they are playing for higher valuation

4. How to present a business plan to
investors

5. You till typically get about 20 - 30
minutes for your presentation
Keep half the time for presentation and half for Q&A
“Show the dish. Don‟t detail the recipe.” – the objective of
the first presentation should not be to share details but to
excite the investor to meet you again for details
Don‟t state the obvious – focus on things that most
people are not likely to know e.g. when presenting about
a solar energy business, data on how renewable energy
is important is not necessary

6. Focus on the business around the concept
or product or service
- What are you going to do – concept
- How are you going to make money – business case
- The size of the opportunity – potential
- How are you going to do it – implementation plan
- How much money do you need – to attract the next set of
investors

7. What should you include in your presentation?
• Concept overview – and why it is relevant i.e. opportunity / need
• Team
• What is the size of the opportunity
• Business model
• Competitive landscape
• Operations plan overview
• Risk factors
• Funding needs and use of funds
• Exit potential

8. What do investors look for?

9. Investors look for competent and committed teams
- Passion and deep interest in the domain
- Deep understanding of the dynamics of the business around
the concept – who will buy, why will they buy, challenges, etc.

10. Investors look for plans with practical milestones
But large aspirations

11. Investors look for teams with focus in the initial
phase
Even when entrepreneurs have identified multiple opportunities
with the concept

12. Investors look for a strong implementation plan
“According to Gartner, the market will be USD 20 bn in 2020” is
not a reason to invest
How you will build the first 1000 customers is.

13. Investors seek teams that have a clearly identified
immediate goals and tasks
What do you need to do to launch?
What are you going to test?

14. Investors seek a plan that clearly outline how much
funding is required, where it will be used and what it
can achieve
You should seek from angels only as much as you require to go till
you can attract VCs
In rare cases will angel funding be sufficient to take the startup to
profitability

15. Finally, investors look for teams they can trust
Be honest about risks & challenges, be open about limitations and
weaknesses
When you tell them where you need help, will they be able to
provide inputs

16. In Summary
Investors invest in a business case around products/services that
address large markets
Investors invest in high-quality teams with large aspirations and
who have a clear understanding of what it will take to achieve the
potential
Investors invest in clearly defined plans with practical milestones
Make the investor go back feeling “What a great concept. I think
the market is large and the team will deliver.”

17. Questions