What Angels Investors Never Wand to Hear
 ORIGINAL ARTICLE [PR.COM]
Los Angeles, CA, October 18, 2006 --(PR.COM)--
Icon Angels is an international angel investments network focusing on cross-border
deals/transactions and therefore is exposed to large amounts of investor presentations
each week. Many of the entrepreneurs that cross the Icon Angels network are truly global
players with promising or even revolutionary products/services. However, the majority of
these companies fail to realize that first impressions mean everything when they are
presenting their company to a potential investor.
Positioning a company so that it attracts the right investors can be a very challenging
process. Yet somehow, many entrepreneurs forget that the investors that they are presenting
to often have started up and sold multiple companies – after all, that is the precise reason
why they are angels. All entrepreneurs must remember one thing: these investors can smell
exaggeration and a shaky plan from the first paragraph of an executive summary – 100% of
the time. This is no joke!
Having said this, Icon Angels often reviews business plans with the same mistakes over
and over again and as a result, it wishes to share some of its insight so that companies
do not fall into the same trap. Icon Angels recommends that entrepreneurs follow these
simple points before sending any investor your business plan.
-
Be realistic in developing any financial projections. There is very little reason to believe
that any start-up company will capture 8% of the US GDP through its proprietary transaction
engine or that although the company is loosing $1million for the first two-years of operation,
it will make a profit of $36 million on its third year.
-
Make sure the company assumptions are based on sound research, as investors will question
them heavily. Any declaration that the company plans to ‘Capture 1% of the market’ is a sure
way to lose any potential investors.
-
Investors are never interested in ‘who will sign’ a massive contract with the company
in two weeks and that the company cannot disclose who it is. Investor want to hear
who the current customers are and what the current business development strategy is.
The same advise goes for any assertion of signing ‘rainmaker’ personnel once funding is
completed.
-
Regardless of what a company is doing, it has competition. There are two levels of
competition: direct and indirect. Company managers must be realistic and present the
threats as they are because the truth ‘will’ surface and when it does, the company will
lose tremendous credibility. Management should stay away from making claims that the ‘100lbs
gorilla’ of the industry is too slow or too caught up in its own bureaucracy to be able to
directly compete with you.
-
Be Realistic. Be Realistic. Be Realistic. Mangers need to build a business plan with
this in thought: “if I were an angel investor, why would I sign a $1 million check to fund
this idea?” Every manager must continuously remember the fact that these people (angel investors)
have been ‘around the block’ and that they can sense shaky deals with a simple glance at any
given business plan.
About Icon Angels:
Icon Angels is an international community of exclusive, accredited, and invitation-only investors
who share a distinct fortitude towards investing into entrepreneurship on a global scale. The
company provides the tools, the technology, the know-how, and the guidance so that its member
investors can lower investment risks as well as the cost of performing due diligence. Its
unique, practical, and direct involvement with the investment process helps both investors
and entrepreneurs ensure a high partnership success rate.
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