November 13, 2008

Angels

 

This morning started with a great visit to a local Angel Group’s monthly meeting.  I always enjoy seeing companies pitch to investors and am especially intent on observing nuance, which tells so much about what the investors are looking for.  I would like to share some of those observations today that may help entrepreneurs gain a more intricate insight into preparation for a fundraising pitch.

Observations:

1.  Without fail the first question after every pitch was calculated to determine the details of the offering. i.e. pre-money valuation, percentage of ownership offered, preferred or common stock, liquidation preferences etc.  I will let you draw your own conclusions but I think this means it is important to the investors.

2.  The company that received the most interest did so in large measure because of the dynamic character of the CEO.  Though the business model, market, financials, deal, traction etc. was all in order, it was the leader that created the buzz.  I heard private discussions such as “I like this guy” and “This kid knows his stuff.”  Oddly enough, the CEO of this company was the youngest of the five presenting.  

3.  One particular turn-off to the investors was either the total absence of the CEO, which happened in one case, or when the CEO deferred to a present or not-present CFO for answers on valuations, deal terms, or financial projections.  In short, the CEO must be present and he should be able to answer all the important questions.

I will leave you to draw the conclusions hear. I think it sufficient to say that it is difficult to understand everything an investor is looking for unless you can get the input of someone who sees it all the time. (shameless plug)