So, how do you get their attention—and their money?

1. Write a great business plan, but know that few will read it.

Business plans are an extremely valuable exercise and should always be presented to show the entrepreneur is serious and has done his homework. However, no one will read past the first page unless they’ve already made somewhat of a gut decision to read further.
So, always include a compelling summary page with visual elements that “advertise” your company. BPlans is a great tool for this. Add video if delivering electronically (try Animoto) and keep it under one minute. People have short attention spans!

 

2. Don’t use acronyms (unless you define them).

People outside your industry will be reading your materials and it is intimidating to read something laden with acronyms. It distances potential investors and they will not have that “gut” feeling they need to get excited. Instead, they will say, “I don’t know enough about this industry to invest in it.”
Additionally, the same acronym will translate differently across industries. B.A. could be a Business Analyst, a Bachelor of Arts, or a Bad Ass. Similarly, dumb down your business plan to an elementary reading level. Your dentist may want to invest in your new software, but she doesn’t know what SaaS is, and Software as a Service doesn’t help her, either.
So, if you reference Software as a Service, you might want to add, “A piece of software you access through the internet and is paid for on a subscription basis, like Salesforce.com.” Oh yeah, now it makes sense.

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3. ABP: Always be pitching.

How does one do this without being obnoxious? By putting himself in as many opportunities as possible for people to ask what he does.
The best way to do this is by asking others what they do first and being genuinely curious about the answer. Naturally, they will follow up by asking what you do. Then know your one sentence answer and follow up with “and we’re raising funds from private investors to get us started.” They will typically ask a question about your business and the conversation begins!
You can do this anywhere. It doesn’t have to be at a formal networking event. The purpose is not to ask the person for money; the purpose is to let everyone know what you do and that you are looking for capital so they can either invest in you or make introductions to people who will.

 

4. Have a pitch party!

Most angels or potential angels aren’t part of a group, but there is value in the group dynamic. Potential investors (and people who know them) get to see that others are excited about the product too, and it reinforces their own positive feelings. Few people want to be “the first” or “the only” investor in your product. Use the power of social proof in your favor.
How? First, get a venue and a time. You shouldn’t have to pay for these. Perhaps the library or a local tech company can host. Look for community supporters and ask around about space. Make the event a weeknight around 7pm, a reasonable time for professionals to get there after work. Offer snacks and drinks and have copies of your business plan ready to go. Allow time for people to network (half an hour usually works) and then welcome everyone and do your pitch. Make your invitations open so people who are not angels can still refer and bring friends. Get them excited about the prospect of a new company opening in their own backyard!
Bonus points: Ask a local expert to give a talk on your industry (make sure it supports your business idea). This gives the attendees another reason to come, allows him to advertise his business, and sets the stage for your pitch.

5. Go for the gut.

You’ll often hear investors say, “I look at all the details, do all the due diligence, but ultimately, I make a decision with my gut.” What does that mean? And how are you supposed to know how their gut feels that day? It’s because pitching is making a sale and all sales are made emotionally and followed up with logic.
Wait, you didn’t want to be a sales person? Well, welcome to the dark side. Everyone is selling something, whether they have the title or not. A professional knows how to navigate through—but not manipulate—people’s emotions. Mostly what they will be buying into is their feeling about the entrepreneur and her passion for the product. After all, the entrepreneur is the one who will be waking up at five every morning to build the company, and she’ll never be more excited about the business than she is today.
Whether you’re speaking one-on-one or pitching to a group, know that 90% of your job is to get people excited about your company. Statistics, facts and figures, profit and loss, projections—all those comprise the other 10%, which is logic. It takes 100% to move forward with the decision to invest, but don’t undervalue the emotional aspect. That’s why the most entertaining pitches get a second look, and ones that are more viable may get ignored.
Substance will come later. The shorter the pitch, the more it should appeal to emotion. Only then will you be given the opportunity to support their excitement with logic.

6. Be transparent.

Though the amount of detailed due diligence done by an angel or angel group can seem intrusive, you’re getting into a long term relationship and full disclosure is required. If there are any holes in your proverbial bucket, now is the time to leak them.
What you may think is a deal breaker may be perceived as a surmountable challenge by an experienced investor. Those pesky requests from angel investors delving into all the private parts of your business will not be as much of hassle if they are anticipated and prepared. Everything does not need to be disclosed right away, but as a serious business owner, you should have the following ready to go:

• Business Plan (should define market, problem, growth potential, sales channels, competition, patent info, exit strategy, profit margins, scalability, milestone markers)
• Financial Model and Balance Sheet (even if there are zeros across the board)
• Management Resumes and Organizational Chart
• Customer References
• Personal References
• Social Security Numbers (for background checks)
• Capitalization Table and Shareholder Roster
• Stock Option
• Grants
• Contact Information (for managers, directors, shareholders, developers if outsourced, attorneys, accountants, consultants)