Raising Finance

5 tips to successfully pitch new ideas to angel investors

5 min read

28 May 2014

Some young entrepreneurs often struggle with being commercial when pitching to angels. Here is a five-step guide to getting your pitch right.

Young business people aged 16-25 will often find it more difficult to get a bank loan or secure an investment pitch to access institutional funding. 

According to UK Business Angels Association estimates, angel investors bankroll around £850m into UK start-ups annually, a sizeable open funding pot for all age groups to access. However, younger entrepreneurs pitching to potential investors for the first time can find it a daunting prospect and securing interest can be difficult.

Our education system gives no training or teaching in normal curriculum time to help a young budding entrepreneur face a group of hardened and experienced angel investors. 

The UK has always produced young talent with outstanding technical ability, but we must encourage those with entrepreneurial ambitions to think more commercially earlier. Communication, marketing and team management skills are needed to develop brilliant ideas into successful businesses.

Throughout my career I have seen pitches that range in quality similar to the auditions on Britain’s Got Talent. Some are outstanding but many have just been awful, often because the commercial logic is simply non-existent. 

The younger generation, in particular, seems to struggle with being commercial. These are some of my top tips for entrepreneurs pitching to investors for the first time:

1. Recognise that it’s not just financial support you’re pitching for

It’s easy to become too focused on the funding itself and to think of angel investors as simply a bank transaction in waiting. As crucial as the finances undoubtedly are, experienced investors can offer far more. This is an opportunity to get long-term advice, support and access to a range of industry contacts. 

Recognise this in your approach, and if you secure it, don’t take it for granted. Remember that your potential investors have genuine interests that they are looking to fulfil, so make sure you understand what they are looking for – not just what you want from them.

2. Get in the room with a mentor on your side

Try to establish a link with an individual from the group you are pitching to far in advance of the presentation. Seek their advice, and actually follow it. Angel groups are often heavily influenced by a representative of the board with a direct link to the person or team pitching. 

If you can get someone batting for you, on the inside and from the off, it will increase your chances of success. Of course, if you seek this advice but ignore it then it will have the opposite effect. 

3. Prepare your time carefully 

Keep it short and focused. Get your key messages across quickly. You only need to prepare about two-thirds of the material you would normally need when speaking conversationally. Do not overload the presentation.

4. Ditch the jargon

It can be tempting to add layers of technical speak in an attempt to convince others of your expert credentials. This is unlikely to impress the real experts, and merely presents them with an opportunity to switch off. 

Keep the language simple, and don’t make the assumption that anyone in your audience has any specialist knowledge. 

5. Be honest

Don’t try to bluff your way through – if you don’t know the answer to a question, say so. Offering to find the answer and email the questioner later shows commitment and a genuine interest in self-development. 

This also has the benefit of establishing a direct connection with a member of the audience, and the potential to be offered another opportunity to pitch for investment on another occasion.

David Gammon is CEO of Rockspring and a serial angel investor. He is also the primary benefactor of the Royal Academy of Engineering’s Enterprise Hub’s new Launchpad competition for 16-25 year old would-be entrepreneurs.