5 Things Investors Look for in Your Pitch Angel investor and CEO, Badal Shah, breaks down the boxes every entrepreneur must check.
By Cohin Kakar Edited by Bill Schulz
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Today's investors are looking for a lot more than just a clear and present pitch. Apart from the executive team and business plan---prospective players want to be assured their investment is sound while the company has real plans for growth.
Badal Shah is a multiple-exit entrepreneur with experience in chemical manufacturing, real estate software and healthcare technology. He currently serves as the CEO for his own start up, The Anthos Group, while also being on the board of directors at The Federal Savings Bank and Cabrera Capital Holdings. Herein the active angel investor shares some of the key characteristics he looks for in promising start-ups...
People plus passion
Active investors have heard hundreds of promises regarding the "next big thing". What pitches often miss, however, is the "wow factor". It is essential to highlight actual passion for the project in question.
"I am inspired by people," says Shah. "Those that have tested new concepts, pivoted from their first love and created something that the public is willing to make part of their lives."
Real passion must always radiate from the actual pitch.
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Thesis and fit
Start up companies and investors play a lot of matchmaking. In many cases, new businesses bypass an investment because the chemistry just wasn't there. It is important to identify this early on because neither side wants to be micro-managed, or deal with extra stress, in an already high-stress situation.
"It's always difficult to balance being humble with being direct about why your company is the best and most investable opportunity," says Shah.
Building relationships, accommodating to the investor's schedule, and presenting in ways they prefer are important factors that go beyond the actual pitch.
Transparency
When a company asks for a large sum of money, honesty is expected by an investor. As the founders build a relationship with an interested party, it is imperative that they are transparent about all areas of their lives so that the same trust can carry on through the relationship.
"I need to understand the founders philosophies, family life and hobbies," says Shah "These are important attributes to understand if they can handle the marathon in front of them."
An investor looks at the big picture, so it is important to share all of the details.
"They can have great concepts, but what is their support structure like?" asks Shah. "If it is not intact, the investment can be risky."
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Strategic raise
Remember that founders are always in capital raise mode. It may not necessarily be in a formal presentation, but you are constantly being evaluated as you share your ideas with new contacts. The company and your coworkers rely on you for the well-being of this venture.
"A great founder should always be raising capital from strategic investors," says Shah. "The greatest time to raise capital is when the company does not need it."
Listening skills
"Is the CEO an active listener?" asks Shah. "If they are listening, and willing to continuously learn, you have someone that is going to succeed."
The open mind can reach new levels while a closed one misses opportunities. Every entrepreneur can identify certain advice that changed their course. While founders may be the technical experts, they should always be open to ideas and guidance.
"If they are not actively listening?" adds Shah. "It is a dangerous sign and my check is off the table."
When owners are pitching, they are being evaluated far beyond whatever their concept might be. Relationship building, synchronization and transparency will cultivate your meet-and-greets with investors and, as a result, put your business in a great position to succeed.
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