Pitching to angel investors can be intimidating, but the truth is that it doesn't have to be. The key to a successful pitch isn't impressing them with flashy slides or overblown promises—it's about selling an idea that will solve a specific problem in a particular industry with a suitable proof of concept or Vertical Slide that can show the high potential of your product.
So, what do angel investors want to know? Let's break it down.
What are Angel Investors looking for?
Angel investors are typically high-net-worth individuals who provide capital to early-stage startups, usually in exchange for equity.
Unlike venture capitalists, they're often more personal in their investments and take a hands-on approach.
They want to see passion and potential in the startups they back, but make no mistake—they're looking for a return on investment (ROI).
They care about two significant things: mitigating risk and maximizing upside. You'll have their attention if you demonstrate how your business achieves both.
Key Questions to Expect from Angel Investors
When pitching to angel investors, there are specific questions they will always ask. Anticipating these allows you to answer confidently and strategically.
1. What Problem Are You Solving?
Investors want to know if your product or service addresses a real pain point.
Be clear on the problem and how your solution is unique.
2. Can you show demand for it?
Investors don't want hypothetical issues—they want validated market needs (data is the king).
3. Who is Your Target Market?
A great idea is not enough—you must know who it's for. Be specific about your ideal customer. Investors are looking for businesses with a well-defined audience large enough to support growth and profitability.
4. What's Your Business Model?
How do you plan to make money? Investors care about the nuts and bolts of your revenue generation. Show them a clear path to profitability, whether it's through subscriptions, product sales, or licensing.
5. What Traction Do You Have?
If you don't know your number, you already fail. Investors want to know your number since it is absolute proof of how you are addressing the business; some of the most important numbers that you must understand and show are.
- CAGR (compound annual growth rate)
- MRR (Monthly Recurring Revenue)
- CRR (Customer Retention Rate)
- Churn Rate
- CAC (Customer Acquisition Cost)
- LTV (Lifetime Value)
If your product is an App, other good numbers to show or analyze are.
- DAU Daily active users
- (MAU) monthly active users
- (ARPU) Average revenue per user
But wait, what happens if I am starting? In this case, it Is recommended that you first validate the idea with the market and your competition numbers and combine it with a Demo, MVP, or Vertical Slide that shows the potential of your investor.
An excellent strategy that most of our clients in Entertact use is starting with a soft launch of their idea with an earlier access promotion; this is a beautiful strategy to validate your idea with the market before launching, showing the number of people who are already interested in your product, which will support your Pitch.
Comprehending KPIs such as CAC, CAGR, LTV, and others is essential. Knowing these numbers will give your Angel investor confidence that you know what you're doing.
6. Who's on Your Team?
Investors are betting just as much on the team as on the idea. Who are your co-founders? What makes you uniquely qualified to execute this vision? Highlight the skills and experience of your team members, as this directly correlates with your startup's likelihood of success;
A plus that you can have in your team is a person who already has experience in the industry as a user; for example, if you are making a SaaS directed to realtors, a plus could be that one of your co-founders will be a realtor (Because he already experiments the pains of the market in a first hand)
7. What Are Your Financial Projections?
We go with numbers again, and I know this is the most tedious part, but Investors will always ask about the numbers—how much revenue you expect to make when you break even and what milestones you'll hit over the next few years.
The Structure of a Successful Pitch
Your Pitch needs to be structured to guide investors through understanding your business and its potential. Here's a high-level outline to follow:
- Introduction: Briefly explain who you are and why your idea matters.
- Problem Statement: What problem are you solving?
- Solution: Based on the problem you described before, How does your product or service address that problem?
- Market Opportunity: What's the size of the opportunity? Describe your Total Addressable Market, Serviceable Available Market, and Serviceable Obtainable Market.
- Competitor: How are you different from your competition?
- Business Model: How do you plan to make money?
- Traction: Showcase any progress or proof of demand.
- Team: Introduce your key players.
- Financial projections: Outline your key predictions. (Road Map or PNL)
- The Ask: End with an explicit, specific request for investment.
Objectives and Goals of the Pitch
When pitching, the goal is to sell your business's potential while building trust. Angel investors are drawn to pitches that show both excitement and realism.
They need to feel your passion and see that you're grounded in a successful strategy
Your Pitch must to:
- Gain trust: Show that you and your team can execute the vision.
- Mitigate risk: Address potential concerns head-on, whether they relate to the market, product, or competition.
- Paint a picture of success: Convince them that your startup has the potential to grow and provide significant returns.
Tools to Prepare for Your Pitch
Success in pitching comes down to preparation. Here are a few tools to help you get ready:
- Pitch Deck Software: Use tools like Figma or Pitch.com to create visually compelling and concise pitch decks. In Entertact, we usually use Figma to create more immersive and dynamic presentation pitch decks.
- Financial Modeling Templates: Google Sheets and Excel map your financials.
- Practice Platforms: Try services like PitchCoach to practice your Pitch and get feedback before the big day.
- Get an Advisor: There are different types of advisors who can support you and help you during your pitch preparation. This can benefit you and give you extra points since the advisor knows more about what you need to add to your Pitch
.
Summary
Pitching to angel investors is about more than showcasing your idea. It's about addressing their concerns, mitigating risks, and presenting a clear path to success.
By anticipating their key questions and confidently structuring your Pitch, you can turn a skeptical investor into a passionate backer.
Remember, investors want to believe in your potential but need you to show them why they should.
Our gift to you
If you need help addressing or making the Pitch that gives you the funding you need, In Entertact, we create this Dynamic pitch deck template with examples you can follow to secure a good structure for your Pitch.
If you already have a pitch but want to improve it or make your value proposition stand out from the rest, you can always book a call with us. At Entertact, we support earlier-stage companies and connect them with possible investors to get the funding they need, depending on their business model.
I need help with my Pitch.
I wish you all the success and hope your dreams come true.
Related Posts
Lorem ipsum dolor sit amet, consectetur adipiscing elit.
Are you ready to Stand out
Become a Entertact Client and obtain your first prove of concept by free!
