How to prepare a pitch deck to pitch the Angel Investor?

Who are Angel Investors?

Typically, Angel Investors are high net worth individuals who invest in the creation of a new start-up company quite early on, usually in exchange for convertible debt or equity. The role of angel investors serves as a vital bridge between a company's startup funding needs and later its broader capital needs.

Who can be angel investors?

A person doesn't have to be an accredited investor in order to be an angel investor. A number of angel investors, though, are accredited investors.

According to the Securities Exchange Commission (SEC), to be an accredited investor, a person must:
1. For the last two years, they have made at least 200,000 a year (or 300,000, for a couple) and would hope to make that amount again.
2. Has a net worth of more than 1 million, alone or with a spouse (excluding the value of the primary residence of the person)

How are angel investors different from VCs?

Angel investors are affluent people (or groups of wealthy people) who invest their own money in businesses.

Venture capitalists(VCs) are venture capitalists company workers who invest the money of other people (which they keep in a fund) into businesses.

What is the primary source of startup funding for angel investors?
Angel investors are spending money on their own, so it can come from a number of outlets.

Perhaps they have sold a startup of their own. In another sector, they would have made a lot of money. It's probably family money.
There is no "where" that we can point to as a primary source of angel investor funding.

Typical investment profiles of angel investors

From angel investors

Angel investors tend to invest in companies they know a lot about that are in industries.
So, for instance, if an angel investor in the real estate business made a lot of money, you can imagine they'd be more comfortable putting money back into that business.

They know the business, after all, including the right questions to ask, what kinds of possibilities exist.

This doesn't mean that this is the only condition for angel investors. They may have made their money in gold mining, but because they think that's where the big upside chance is, they are trying to make investments in tech companies.

Although you wouldn't want to rule out an angel investor who didn't come from your industry, you would certainly want to first look for others who may have an integrated affinity with your industry.

This doesn't mean that this is the only condition for angel investors. They may have made their money in gold mining, but because they think that's where the big upside chance is, they are trying to make investments in tech companies.

Although you wouldn't want to rule out an angel investor who didn't come from your industry, you would certainly want to first look for others who may have an integrated affinity with your industry.

How do angel investors value a company?

Angel investors typically come on early in a startup's life cycle. The fact that they are able to put money into pre-assessment start-ups, which may have a hard time finding funding sources elsewhere, is one of the reasons they're called "angels".

How do you value a business that still doesn't have any metrics?

One way is, instead of any numbers or metrics, to really emphasize the squad. In particular, Angel investors are interested in investing in the founder, with less focus on current profit or sales, which are often non-existent for start-ups in the early stage.
That doesn't say, though, that angels invest only in the creator. They also look at more quantifiable words, such as the scale ofmarketing in which the startup is, the item itself, how competitive the environment is, and, yes, if the startup still has any marketing or revenue.

It's your duty as a founder to persuade the angel investor that you're the guy who runs this business and that this business is going to be a serious player in the field.

How do you pitch an angel investor?
It isn't that difficult to find out how to better pitch angel investors. Much of it is about common sense and only handling angel investors the way you'd like to be handled.

Despite what you might hear, you don't expect to go through any intricate sales routine if you want to pitch angel investors. In a convincing way, it's a matter of delivering great knowledge, while doing so frankly and with compassion.

1. The Pitch of the Elevator
Your elevator pitch is the first thing you are going to give to angel investors.
Your elevator pitch isn't a pitch for sales. It's a brief, well-crafted description of the issue you're solving, how you're solving it, and how large there is a need for that solution.
It's that. In the introduction, you don't need to "sell" the angel investor. Your chance should speak for itself.

2. The Profile for the Pitch
But it is a surefire way to never even make it through the spam philters of an investor to submit your elevator pitch along with a 20 megabyte PDF paper. You can instead send a link to your pitch profile, which is an online profile that describes your offer a little bit and offers a way to request more information from the investor. You'll either get a brief "no" or a request for more details when and if the angel investor responds to your question. Most angels, who are very similar, will request either an executive summary or a pitch deck.
At this point, the angel investor is not interested in finding out as much detail about your offer as possible. They're simply trying to find out a little bit of details about your contract, just enough to decide whether they want to spend more time with you or not.
But don't overwhelm the investor with the last piece of data you've ever gathered for fear of "not seeing it all."
They're probably researching a million other offers at the same time so that even if they wanted to (which again, they don't) they couldn't check your tome of information.
Simply let them know that further specifics are available upon request.

3. The Summary Executive
Asking for an executive summary is the more traditional request from an investor. This has become less and less popular over the past decade, with most preferring a pitch deck.
The executive summary is a business plan synopsis of two to three pages covering topics such as the problem, solution, market size, competition, management team and financials. It is usually in a narrative style and covers each segment with a paragraph or two.
The angel investor can be expected to jump to the segment he's most worried about, read a few lines, and then maybe look a little deeper. He thinks that in your pitch meeting, you'll answer most of these questions, so he's not going to waste too much time on your docs.

4. Deck of the Pitch
A more likely request is for you to send over a deck of pitches. In a PowerPoint document, a pitch deck is simply your marketing plan or executive summary spread across 10 to 20 slides.
Investors like pitch decks because, instead of an endless list of bullet points, they force the entrepreneur to be brief and ideally use visuals. The pitch deck, in the angel investor pitch process, is your friend and most trusted ally.
In order to get meetings, you will use it as your key collateral object, it will be the focal point of your meetings, and after your meetings it will be what investors peruse.

5. The Meeting for the Pitch
You'll obviously set together a time to go in for a pitch meeting after the angel investor has checked your documents and decided that they are interested in meeting you. Your pitch meeting is about the investor liking you more than just pitching your idea as a human. Take a little time to try to build a friendship. For an idea they have any concerns about, investors would invest more often in an entrepreneur they like than an idea they like and an entrepreneur they think is a jerk.
You'll run through your pitch deck and answer questions during the pitch. In 60 minutes or less, the objective is not to get to the end of the pitch deck. The aim should be to identify an aspect of the organization that the investor is genuinely worried about and zero in on that point.
Don't hurry them if the investor needs to spend 60 minutes learning about the first slide. For showing the 20th slide, you don't get points.
Concentrate on the talk.

6. The Pitch Phase Goal
The aim of your first few meetings is not to "close" the investor of the angel, it is to build a relationship that will eventually lead to closure.
The investor is not someone who wants to purchase a car that you have to provide a lot of money for.
Only be yourself. Reflect the potential and your business passion. That's what you need to persuade others to get a deal done.

Affiliated vs. non-affiliated

Angel investors

Two forms of angel investors are available: associated and non-affiliated.
An angel investor that is associated is one that already has some sort of contact with you or your startup.
Someone who has no contact with you or the start-up is a non-affiliated angel investor.
You can think of them as relations that are warm and cold. (And, obviously, starting with warm conations when you're looking for angel investors for your start-up is always a good idea.)

Advantages of working with angel investors
The fact that they are often more willing to take greater risks than conventional financial institutions , such as banks, is one of the major benefits of partnering with angel investors.
In addition, while the angel investor takes a greater risk than a bank would, the entrepreneur takes a smaller risk, and if the startup fails, angel investments usually don't have to be paid back.
As angel investors are usually seasoned business people who have already been behind them for several years of success, they bring a lot of expertise to a company that can accelerate growth speed.
Many start-up founders learn something from scratch, so it's a big benefit to have that level of experience on the team.

Disadvantages of working with angel investors
The primary downside to partnering with angel investors is that when they take on this form to private investment, entrepreneurs give up some control of their company.
Angel investors buy a share in the startup and expect a certain amount of participation and say as the business goes forward.In the term sheet, the exact specifics of how much the angel investor is said to get in return for their investment should be explained.