By Antonio A Arias
At angel investor forums, it is quite common for entrepreneurs to make the mistake of over selling its projections with little discussion of its past and present financial status. Therefore, the story does not flow and only begs questions distracting us from the value proposition.
Remember: financial investors (unlike strategic investors) are interested mainly on how they will get a return on their capital and when. For a short ten minute pitch, hit the bullet points fast.
How much was invested by the founders and other shareholders? Where did the money go? What were the results or milestones?
What is the status of the business? Sales funnel? Sales traction?
How much funds are needed to move forward? Use of proceeds? Expected results?
The key is to earn the investors’ confidence fast. There is no sense talking about the projections without a quick recount of the past performance and present realities. Unless the business has proven its marketing strategy, reporting on the customer development status is the more meaningful information. Defending a 3 to 5 year financial forecast and valuation is a total waste of time.
Establish instant credibility. Always show a financial forecast starting with the past and the present.