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I'm currently raising capital for our startup and I have my first meeting with an angel investor next week. We are have achieved product/market fit, are ready to launch and are looking for $1.5 million, probably from several angel investors.

I know there are a lot of articles out there about pitching and raising capital - and I've read a tonne of them - but I would like to hear from those of you who have raised capital about the approach you have taken. What tips can you give me to get the signatures on the term sheet?

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I have raised around half that amount in any one round, but I have recruited a range of specilists to work with us on projects, so here is my 2 cents ...

Tricks, never worked, enthusiasm and a solid plan for the product did.

These days I focus on the roadmap, what comes first (can't live without), what will wait (features to draw most people), what we will most likely take input from the market about (things that could go either way).

Honesty about the costs, development, marketing, sales and support. Take it year by year, talk in numbers of people needed to meet demand ... don't make up some magic figure say average $80K per person, 3 dev, 2 marketing, 1 support in the first year ... if it goes quicker we expect 2 more support and 1 more dev ... marketing should stay as is.

If there are several small investors then explain that you will only take their money IF you get the minimum required for one year ... But your aiming for 2 through 3 or 4 investors ... more an the dilution is to high and I wouldn't bother.

Good luck, let us know how it goes ...

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Format wise, Joseph's one isn't bad. I don't tend to have that many slides, its more here is a picture of the end goal > here are the key pieces that will make it > then what we need from you. More like 3-4 slides and ideally a whiteboard with me drawing, waving my hands around and answering questions. – Robin Vessey Apr 5 '11 at 4:11
Thanks Rob. I am finding so far that investors are asking VERY detailed questions about some aspects of the business. This is good in that it is giving me further things to work on, but although I am a detailed person, I am a bit surprised at how incredibly in depth they want to go - and this is at the first meeting! – Susan Jones Apr 27 '11 at 12:11
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Congradulations! What an exciting time.

This is my formula (everyone has their own)

  1. The problem
  2. The solution
  3. The opportunity
  4. The team
  5. The numbers
  6. The pitch

You should be able to do these in one sentence. Or one paragraph. Or one slide. Or one page.

Collateral

I walk in with:

  • A good presentation that is no more than 12 "slides".
  • A 1 page overview
  • 3-year financial proformas (include three levels of scenarios and assumptions)

Practice

Before you go -- practice, practice, practice. Give your presentation 10 times. At least two should be to advisors and people who will ask the hard questions. Write out answers to the questions you are likely to get. The physical process of writing out the answers will help you commit them to memory. Practice them with the audience. Video yourself. Watch. Be critical. And then practice again.

Team Effort

Remember you are selling yourself and your team as much as anything else. Make sure that your team works as a team. You demonstrate your confidence in your team by allowing them to talk and participate in the dialogue.

You have competitors

It is not a trick -- but a best practice. You may be asked who your competitors are. "No one" or "We don't have one" is not really a very good answer. There is always a competitor. "The status quo" is a competitor. Non-website alternatives to addressing the issues is a competitor. Get out of your market niche space and think about the decision making process of a customer and what are all the "competitors" to them choosing you!

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Thanks for the detailed answer Joseph. We have covered off on those points – Susan Jones Apr 27 '11 at 12:08

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