Guide to Pitching Angel Investors with Jeff Saling
What does it take to earn the confidence of angel investors? What does it take to get an early-stage startup funded? And what does it take in a post-pandemic environment?
Angel investor Jeff Saling who is also executive director of StartUpNV, Nevada’s only State-Wide Business Incubator, which helps startups take business ideas from beta to revenue.
Jeff led a clinic full of founders who were eager to learn how to fund their startups.
In terms of how the pandemic has affected the types of companies getting funded, Jeff says contrary to what you might think, in times of economic turndown people start companies. In fact, many of the most popular brands today had their start at the 2008 crisis. That rings true to me. I launched iPRSoftware right after the dotcom bubble burst.
What Jeff does through StartUpNV and its sister venture, a boot camp called AngelNV, is connect investors and startups. When they launched AngelNV, they expected about 70 startups to enroll in their founder program, but instead they attracted more than 300. So all in all, while the pandemic has obviously been bad for the economy, it has also opened some windows of opportunity.
You can’t make generalizations about what types of companies are getting funded these days. Jeff says it depends on each individual investor. For instance, he likes to invest in software companies. “They’re super capital-efficient, you don’t need to invest in huge inventories, manufacturing, etc”.
Focus on Sector Angel Investors
He’s been heavily involved in the sector, so he feels comfortable in investing in software businesses. Similarly, other investors will fund ventures they know and feel comfortable with as well. So if you’re a startup, it makes sense to look for investors who are comfortable with you industry.
Focus on Local Angel Investors
Proximity, particularly for early stage investors, matters too. Most angel investors fund local startups. “Early capital usually comes from family and friends, from somewhere near you. People who care about the local community they live in and want to see it succeed. So you want to develop that local ecosystem of angels. StartUpNV has had 17 of the startups in our group raise $40 million dollars this way,” he says.
Elements of the Perfect Pitch
Cover two these 4 things:
- What is the problem that you’re solving?
- What’s the solution that you’ve created?
- Who’s your addressable the market? How big is it? How quickly can you get at it? What’s the competition?
- And what’s your business model? How is it you’re gonna make money?
- Who’s the team?
That’s how you explain an investment opportunity. It’s about the problem, the solution, the addressable market, the business model, the team, and the investment opportunity. Those are the big five.