The following is a guest post from Pete Sanders, the CEO of BrixHQ and an Entrepreneur in Residence at AngelLoft:
In March we were privileged to be accepted into the AngelLoft Entrepreneur in Residence program. In summary, AngelLoft’s mission is to provide angel investors and entrepreneurs with the ideal environment within which to have a meeting of the minds. The group is based in Sydney and is open, by invitation, to angel members and entrepreneur pitches from anywhere in the world.
We’re ecstatic to part of AngelLoft and the Entrepreneur in Residence program.
We attended our first Angel Loft dinner in late March and introduced ourselves and BrixHQ to the group which included a seriously impressive range of angels and other entrepreneurs.
The evening was a fantastic opportunity to meet the angels, understand their backgrounds and start to build a relationship with some of the angels, even if only for feedback at this early stage. The feedback and comments that we’ve received from a range of angels & VC’s that we’ve spoken to since the first dinner include the following;
* Who are you competitors?
* How are you different to your competitors?
* What’s your business model (i.e. how do you make money)?
* How are you currently funded? and so on.
There are always two sides to these conversations however and some of the key questions that we’ve sought to understand from the angels are;
*What types of businesses do you typically invest in?
* What are the key things you look for when you are considering investing in a business?
* Do you have any feedback or comments for us?
The first question is crucial, it is important to firstly qualify what sort of businesses the angels are interested in. Plus, if you are time poor and want to have a meaningful conversation and future relationship then it is best to get off on the right foot or you can be wasting everyones time.
From our experience the top 5 key things angels are looking to invest in are;
1. a solid business idea that is being executed on,
2. the business has to be scalable (i.e. how big can it become?),
3. revenue – the business has to be on the right trajectory with revenue and growth, it’s great to have a lot of customers but if you dont have revenue then you don’t have a business.
4. management team – who are they, what experience do they have and have they done this before.
5. how long can you keep funding yourself through current funding sources.
The great thing about angels is that they will have feedback and comments for you, it might just be that it’s not for them and they’ll explain why or give specific comments or advice or direction that can help to move your business forward.
There’s nothing new or different in these 5 points above, but all serve as a fantastic litmus test for any business which is in start up mode or looking to raise funding in the future.
Also know your business intimately, be able to speak at a high level about your vision and your market, but be prepared to dive deep into the detail when appropriate.