How Do I Attract Potential Investors?

Angel investors (known in Europe as "Business Angle", or "Angle" for short) are individuals who have rich incomes and provide startup capital for startups. Angel investors' investment usually requires obtaining the equity capital of the invested company.

Angel investor

Right!

Angel investors (known in Europe as "Business Angle", or "Angle" for short) are individuals who have rich incomes and provide startup capital for startups. Angel investors' investment usually requires obtaining the equity capital of the invested company.

Chinese name

Angel investor

Foreign name

Business Angle

According to the University of New Hampshire Entrepreneurship Research Center, there were 225,000 active angel investors in the United States in 2005. Beginning in the late 1980s, angel investors began to merge themselves into informal groups, with the goal of sharing investment projects, investigating the results of investment projects, and integrating personal funds into larger investment funds. Angel Investor Group One

Specifically, as an angel investment, it generally has the following characteristics:

1. The investment targets are mostly small and medium-sized high-tech enterprises in the seed stage and the start-up stage. Angel investment is an investment form that pursues high returns at the cost of high risk. Traditional industries, whether it is labor-intensive light textile industry or capital-intensive heavy industry,

The essence of angel investment is equity investment, not borrowed funds, and angel investment is not a simple investment, but has its own unique investment judgment standards, investment contract construction and management methods, and unique ways to achieve value-added.

It is not difficult to become an angel investor. To be absolute, as long as you have money, it is not so simple to truly become a successful angel investor, because after all this is a science, angel investors are not It means that as soon as your head is hot, you will blindly clap your investment. The investment process also goes through a series of

Funding a new or growing business is often a long and difficult task. Paradoxically, when entrepreneurs sell proposals to investors, investors may make key investment decisions within minutes. The marketing proposal is extremely risky. Whether it can create a good impression and attract the interest of investors is a success. Anyone who has participated in the British "Longtan" column or watched this TV show would agree. Proposals are the essence of a business plan: a 10 to 20 minute lecture followed by a question and answer session. In some cases, especially when selling to venture capital investors, Q & A may take place during the proposal process. According to Danny Rimer, a partner at Pan-European Venture Capital Fund Index Ventures, "The business proposal is entirely about a theme, that is why this business is a good opportunity, and the proposal is an opportunity for entrepreneurs to defend it."

proposal

Proposals have long been part of the process of winning venture capital. Colin Mason, a professor of business at Strathclyde University, believes that as the investment process becomes more formal, when you seek funding from business angels, individuals or a small group of investors, Become more and more important. Business angels, individuals or a small group of investors generally provide less financial assistance than venture investors.

Although angel investors will see the presentation earlier than venture capital investors, venture capital investors usually do not go to the business plan before the proposal, but in either case, the purpose of the proposal is to win the second Meeting (instead of receiving immediate funding guarantees).

Entrepreneurs only impress people for a short time, according to Kimberly Elsbach, a professor of management at the University of California, "Research shows that humans can classify people in 150 milliseconds; 30 minutes They will judge your character, and that judgment is permanent. This paper, published in Harvard Business Review, How to Pitch a (Brilliant Idea) also said: "Any judgement on the ability of a sponsor will quickly and permanently mask perceptions of the value of the idea itself."

Indeed, the chances of success of the proposal are not high: for example, a study of Canadian business angels showed that nearly three-quarters of proposals were rejected before their commercial proposals were seriously considered.

However, lecture skills can be learned, and the famous lecturer Jerry Weissman believes that any kind of proposal follows general communication principles.

But there are no shortcuts to completing a successful proposal. "Many entrepreneurs don't realize that the proposal itself is just the tip of the iceberg," said Doug Richard, a veteran entrepreneur and corporate angel who acts as an "investment dragon" on the "Longtan" show. "It's a lot of effort As a result, without doing this well in advance, it is impossible to complete a good proposal. "

The following suggestions will help entrepreneurs increase their chances of success.

Passion

The proposal has a key purpose: to excite investors about this business opportunity, and to excite the team's ability to realize this opportunity. Investors are looking for entrepreneurs who are passionate about what they do, and they have a commitment to achieving their goals.

"Passion is essential." Mr. Lemo said, "Passion enables entrepreneurs to persevere even in the face of difficulties. Passions can spread like wildfire." In his experience, many British entrepreneurs have shown a strong sense of success. Passion, in contrast, their American counterparts "are often more profitable and guided by money." But the speaker must beware of bragging and make an arrogant impression. "We are the best. We built one of the largest mousetraps," Mr. Lemo said. Similarly, too much passion can cause the speaker to lose focus. "Although I want to see entrepreneurs focusing on their careers, he shouldn't be overly emotional and forget to give me the information I need to evaluate this business opportunity," said another angel investor, George Arnate. Allnutt) said.

Concise and accurate

Since entrepreneurs need to attract investor attention in a short period of time, the proponents need to use concise, accurate

Angel Hong Zhou

The right way to quickly lift investor appetite. To describe business opportunities in the most concise terms, this requires entrepreneurs to focus on key information that investors really need to know. "To know how to effectively show business opportunities to potential investors, what an entrepreneur needs to know is what different investors want from this opportunity, he needs to be able to anticipate the issues that investors care about, and These issues were expressed in the lecture, "said Professor Mason. Guy Kawasaki of Garage Venture summarizes his approach in a "10-20-30 rule." He suggested that entrepreneurs should not have more than 10 presentations, no more than 20 minutes of speeches, and choose a font size of 30 for the presentation (this limits the amount of information you can put on a presentation). "Brief forces entrepreneurs to simplify their proposals. If you need more than 10 presentations, more than 20 minutes of speaking time, and less than 30 fonts, then you don't actually know what you are doing," he argued. "No point is too complicated to be clear in 5 minutes," Mr. Richard added. Alastair Cavanagh, manager of Oxford Angel Investments, a corporate angel network, said, "The worst case scenario is when a person tries to explain everything and ends up with anything useful Did not say. "

Make yourself a product

Professor Colin Mason believes that entrepreneurs want to sell themselves as they sell products. He studied the (bad) investment proposal made to the corporate angel and found out how badly a bad proposal sale would affect the speaker's ability. "Angel investors often come to the conclusion that if this entrepreneur can't convince investors, he can't convince customers," he said.

Hugh Parnell, director of the corporate angel's Great Eastern Investment Forum, agrees. He said: "Although selling to a corporate angel is different from selling to customers, the two properties are similar: it's about how to tell a story. If no one in the team is good at telling stories, it really gives people the ability to team And the chances of success are marked with various question marks. "But when raising venture capital, sales without a strong proposal may not be a big problem. "Every team needs a star, and if they don't have the right sales talent, we can find such people through relationships and networks. But they must frankly acknowledge this fact," Herman, one of the founders of Amadeus Capital Partners Limited Hermann Hauser explained. This venture capital firm specializes in technology investments in the UK and Europe.

Problem solving, market segmentation

The product exists to solve a specific problem. But investors often see those "the solution is looking for a problem" or a solution is trying to express too many problems. "Entrepreneurs often fail to explain what products can do for customers. Therefore, sometimes there is something that" innovates for innovation "rather than a product that people really buy to meet market demand," Mr. Cavanaugh Say. Similarly, entrepreneurs are advised to focus on one point and break down market opportunities, especially if the product has multiple uses. "Entrepreneurs need to segment the market and choose the one where they can really make a difference and truly differentiate themselves. If they can't differentiate their products, they are unlikely to succeed," Mr. Hauser said.

Proficient in business and frank

Answering investors' questions is a vital part of the proposal process. Entrepreneurs need to respond intelligently, showing that they understand people, listen, and interact. In Mr. Hauser's words, this is "a time for investors to observe entrepreneurs." During the presentation, the proponent must not become self-defense and aggressive, he must respond in a calm and dialogue manner. Entrepreneurs are expected to be experts in the field, especially in the market. "When a person speaks contrary to people's expectations, this is true of most good sponsors, especially when they are presenting some new ideas. Entrepreneurs not only need to speak confidently, but also have data to support these claims "Mr. Richard said. Although no one expects one person to answer all the questions, the speaker must be prepared to face something he does not know. The team should list a list of questions that may be asked during the answering phase or that need to be explained, and they can address these issues when preparing the presentation.

In this way, they can "detail" or "compress" the presentation, depending on the needs of the audience. Don't deceive, because investment decisions depend to a large extent on investors' judgments on the credibility and personality of entrepreneurs.