The 5 Best Pitch Tactics I Heard as an Angel Investor 

 

One of the blandest bits of advice that I always hear for pitching to angel investors is to “stand out.”

I think I’ve rolled my eyes at that tip so many times that I’m beginning to worry about my vision. Of course, you want to make a memorable impression, but at the end of the day, you want to be remembered for your amazing idea, not for a flashy gimmick.

I had the great pleasure of spending a year as a member of the angel investor group Tech Coast Angels, where I heard numerous pitches from entrepreneurs. During my time there, I discovered that the best pitches have five elements in common.

1. They connect with the heart.

Pitching is about understanding what the investors are most interested in and developing a conversation that connects on an emotional level. Tell a story that’s relatable, inspirational and addresses the marketplace problem you’re solving. Let them see every ounce of the passion that drives you.

Your passion will differentiate you in their minds because it’s an admirable character trait that shows promise. It makes a statement that you’re going to make your dreams happen with or without their help, and that will make them want to be a part of your success story.

Related: Don't Buy Into the Lies -- It's Possible to Have a Career and a Family

2. They connect with the head.

Telling an inspiring story won’t get you far if your idea is still floating in the clouds. It needs to be firmly planted in the ground where it can grow. You have to prove very quickly that you know your stuff, or the investors will stop listening.

I once saw a pitch for a waterproof case for iPods. The entrepreneurs utilized fun, attention-grabbing tactics, but what I remember most was their unique value proposition and business model, which involved a good sales distribution strategy that allowed faster time to market. They knew exactly how they wanted to build a company around a product they loved.

Investors want to know why your product solves a problem or is a “must have.” Be ready to answer all sorts of questions: How large is your market? Who are your competitors? Why is your product better than the others? What is your customer acquisition strategy? Is there a big enough market and customer base for the idea? People are often rejected due to overvaluation or the lack of a competitive advantage, so be careful in those areas.  

3. They don’t mimic a spreadsheet.

One of the biggest mistakes I saw in pitches was incorporating too much data and statistics. You want to include the market size and analysis, but don’t spend too much time on it. It’s more important that you convey a value-oriented, compelling and memorable message, so be precise and simple. Don’t come with a 30-slide PowerPoint; use 10 to 12 slides, and make each slide count. A simpler idea is easier to understand and buy into.

Related: The Only 10 Slides Needed When Pitching Your Business (Infographic)

4. They have a great team dynamic.

Investors are looking at you and your management team. They know a bad partnership can ruin a business. Your partners and the team dynamic should help inspire confidence, not raise questions. If investors sense any friction, they’ll fear your failure. If you have an experienced, seamless team, it’s easier to win over investors.

I once saw a pitch from a company that had developed a diagnostic device to detect diseases in women’s reproductive organs. This company had an extensive advisory board supporting the product, and the CEO had solid experience in taking a company to the next level. The people behind the product made me want to invest.

5. They leave investors wanting more.

Angel investors invested more than $20 billion in 2010. To get a slice of that pie, you don’t just need a strong conclusion -- you need an exit strategy that informs investors how they’ll get their money back. They could love your idea, but if they don’t think they’ll make money off of it, they’ll share their wealth elsewhere.

Pitching your idea to investors is daunting. But when you have a great idea, a smart business plan and amazing people backing you up, you can wow investors and get the financial backing you need.

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3 Must-Haves to Raising Money Without a Product 

 

Sand Hill Road is the birth place of Silicon Valley, and arguably the most powerful road on the planet. Even though the world of venture capital has slowly started to decentralize, it is still home to some of the largest venture funds on the planet. And there I was, pitching to a team of high profile investors, without a product, yet again.

I'm always on Quora and the question, “Is it possible to raise funding before building the product/app?” was asked. My short answer is “yes, it's possible.” I know it's possible because I have first hand experience of successful raises without a product.

Related: 4 Steps to Beating the Odds and Winning Startup Capital

Some of my firsthand experience is as follows: I was previously involved in a $2.2 million raise that did not have a product upon funding (mind you, it was an actual consumer product, not a digital product, which is what I am actually referring to now). I've personally done it a handful of times, with my largest raise being a six-figure investment with no product. Plus, I am confident we will raise $650,000 for this business, without a product, based solely on our demo.

From my successful experiences, here are the three must haves:

1. Team 

You ever hear the saying, “we don't bet on the horse, we bet on the jockey”? It's a mantra for most sophisticated investors around the world. When working for an angel investment team in my younger years, we lived by it. In fact, besides our industry focus and size of deal, that was our main investment criteria.

For some investors, team is the single most important factor they consider when placing their capital. Do not confuse that with previous success as there are plenty of inexperienced entrepreneurs that get funded. However, you need to be able to articulate why you are the right team for this opportunity to accomplish your vision.

Assembling the right team for your mission will be a testament of your ability to lead, influence and enroll people into your vision. Don't underestimate the power of the right team. 

2. Demo

If you don't yet have a product, as in our case (we are still in development), you best have some sort of demo. Long gone are the days where you could roll up to an investor meeting with a pitch deck and a dream (well, anything is possible, but being an entrepreneur is hard enough).

Related: 8 Questions That Will Help Set the Right Expectations With Investors

Figure out what that means for your business. For us, we mocked up some key pages of our platform that helps portray the vision, and inputted them into the Invision app, which takes Photoshop files and makes them clickable via hot buttons that makes it almost feel like you're clicking through the pages of a website.

Without a product, some sort of demo is mandatory because it helps portray your vision, and shows anyone thinking about investing that you're serious enough to get started.

3. Validation

You need to be able to validate the market opportunity. If you're developing a mobile app, create a landing page and run Facebook ads to build an interested list of people who would sign up for your app. This shows a demand in the marketplace.

Referring back to the importance of team, sometimes an effective validation technique is to get someone of industry importance to join your team in some role. This can create the subtle notion that, “if this industry expert is going to be involved (and they obviously know much more about this space than I do), then this is probably worth pursuing." Plus, more often than not, that industry expert can navigate some of the nuisances and pitfalls of the space.

In our case, we have a number of validation techniques, with one point being twofold. We've struck a big deal with a major media company that is going to be our first customer. There's double validation because it's a well-known company and they're going to be a customer. Validation at this point, for those without a product, is another critical factor that will contribute to your funding success.

Boom. This should be easy enough, right? Don't be discouraged if it takes longer than you expect. Capital raises are tough and always more time consuming than anyone ever hopes. 

In summary, yes, it's possible to raise funds without a product, but it's also possible to swim the Atlantic, paint an exact replica of the Mona Lisa and win the Crossfit Games four years in a row. Good luck, and happy funding.

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How to Create My New Company Name ?

 

How to Create Name a Business

What's in a name? A lot, when it comes to small-business success. The right name can make your company the talk of the town. The wrong one can doom it to obscurity and failure. Ideally, your name should convey the expertise, value and uniqueness of the product or service you have developed.

Some experts believe that the best names are abstract, a blank slate upon which to create an image. Others think that names should be informative so customers know immediately what your business is. Some believe that coined names (that come from made-up words) are more memorable than names that use real words. Others think they're forgettable.

In reality, any name can be effective if it's backed by the appropriate marketing strategy. Here's what you'll need to consider in order to give your small business the most appropriate and effective name.

Enlist Expert Help to Start

 

Coming up with a good business name can be a complicated process. You might consider consulting an expert, especially if you're in a field in which your company name may influence the success of your business. Naming firms have elaborate systems for creating new names and they know their way around the trademark laws. They can advise you against bad name choices and explain why others are good.

The downside is cost. A professional naming firm may charge as much as $80,000 to develop a name. That generally includes other identity work and graphic design as part of the package, according to Laurel Sutton, a principal with Catchword Brand Name Development. Naming services that charge as little as $50 do exist, but spending a reasonable amount of money early for quality expert advice can save you money in the long term.

What's in a Name?

 

Start by deciding what you want your name to communicate. It should reinforce the key elements of your business. Your work in developing a niche and a mission statement will help you pinpoint the elements you want to emphasize in your name.

The more your name communicates to consumers about your business, the less effort you must exert to explain it. According to naming experts, entrepreneurs should give priority to real words or combinations of words over fabricated words. People prefer words they can relate to and understand. That's why professional namers universally condemn strings of numbers or initials as a bad choice.

On the other hand, it is possible for a name to be too meaningful. Common pitfalls are geographic or generic names. A hypothetical example is "San Pablo Disk Drives." What if the company wants to expand beyond the city of San Pablo, California? What meaning will that name have for consumers in Chicago or Pittsburgh? And what if the company diversifies beyond disk drives into software or computer instruction manuals?

How can a name be both meaningful and broad? Descriptive names tell something concrete about a business -- what it does, where it's located and so on. Suggestive names are more abstract. They focus on what the business is about.

Consider "Italiatour," a name that was developed by one naming company to help promote package tours to Italy. Though it's not a real word, the name is meaningful and customers can recognize immediately what's being offered. Even better, "Italiatour" evokes the excitement of foreign travel.

When choosing a business name, keep the following tips in mind:

• Choose a name that appeals not only to you but also to the kind of customers you are trying to attract.
• Choose a comforting or familiar name that conjures up pleasant memories so customers respond to your business on an emotional level.
• Don't pick a name that is long or confusing.
• Stay away from cute puns that only you understand.
• Don't use the word “Inc.” after your name unless your company is actually incorporated.

Get Creative

 

At a time when almost every existing word in the language has been trademarked, the option of coining a name is becoming more popular. Some examples are Acura and Compaq, which were developed by naming firm NameLab.

Coined names can be more meaningful than existing words, says NameLab president Michael Barr. For example, "Acura" has no dictionary definition but the word suggests precision engineering, just as the company intended. NameLab's team created the name Acura from "Acu," a word segment that means "precise" in many languages. By working with meaningful word segments (what linguists call morphemes) like "Acu," Barr says the company produces new words that are both meaningful and unique.

Barr admits, however, that made-up words aren't the right solution for every situation. New words are complex and may create a perception that the product, service or company is complex, which may not be true. Plus, naming beginners might find this sort of coining beyond their capabilities.

An easier solution is to use new forms or spellings of existing words. For instance, NameLab created the name Compaq when a new computer company came to them touting its new portable computer. The team thought about the word "compact" and came up with Compaq, which they believed would be less generic and more noticeable.

Test Your Name

After you've narrowed the field to four or five names that are memorable and expressive, you are ready to do a trademark search. Not every business name needs to be trademarked, as long as your state government gives you the go-ahead and you aren't infringing on anyone else's trade name. But you should consider hiring a trademark attorney or at least a trademark search firm before to make sure your new name doesn't infringe on another business's trademark.

To illustrate the risk you run if you step on an existing trademark, consider this: You own a new manufacturing business that is about to ship its first orders when an obscure company in Ogunquit, Maine, considers the name of your business an infringement on their trademark. It engages you in a legal battle that bankrupts your business. This could have been avoided if sought out expert help. The extra money you spend now could save you countless hassles and expenses further down the road.

Final Analysis

If you're lucky, you'll end up with three to five names that pass all your tests. Now, how do you make your final decision?

Recall all your initial criteria. Which name best fits your objectives? Which name most accurately describes the company you have in mind?

Some entrepreneurs arrive at a final decision by going with their gut or by doing consumer research or testing with focus groups to see how the names are perceived. You can doodle an idea of what each name will look like on a sign or on business stationery. Read each name aloud, paying attention to the way it sounds if you foresee radio advertising or telemarketing in your future. Use any or all of these criteria.

Keep in mind that professional naming firms devote anywhere from six weeks to six months to the naming process. You probably won't have that much time, but plan to spend at least a few weeks on selecting a name.

Once your decision is made, start building your enthusiasm for the new name immediately. Your name is your first step toward building a strong company identity, one that should last as long as you're in business.

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