Month: March 2016

Tip #4 “How big’s the itch and is it spreading…like a rash?”

To continue the itch metaphor from proposal tips #2 and #3 (which dealt with the importance of giving a clear explanation of the itch you scratch and how you scratch it), in this post I’d like to touch on the size of the itch and how it’s growing.

For those of you beginning to find my strangled metaphor tedious, I’ll stop. I’m talking, of course, about the market your business operates/plans to operate in.

It’s no use solving a problem – even if you solve it unbelievably well – if it’s a problem only extant for a single hermit on the remote island of Tristan de Cunha, then it’s great for the hermit, but not a viable business (unless he’s sitting on pots of gold).

The problem you solve has to be one that a large and growing number of people suffer from without a solution; and are willing to pay for.

The more statistics you have to indicate this, the more prospective investors are likely to give your idea credence! There are plenty of websites available to help you with this, so don’t skip this bit…

Some good news came in over the weekend in a press release from Atlantic Healthcare. It’s encouraging to see our Pharmaceutical companies flourishing alongside their arguably more trendy tech counterparts.

We raised circa £350,000 for Atlantic Healthcare as part of their seed round. It’s taken a few years, but that’s nearly always the way with pharmaceuticals; and now they’ve just closed a $24 million round with funds coming from the founders of Salix Pharmaceuticals, Inc.; Fullbrook Thorpe Investments LLP (the family investment arm of Andy Leaver, founder of Clinigen Group plc); and LDC (the private equity division of Lloyds Banking Group plc); alongside their existing investors.

This round will allow them to complete the pivotal Phase 3 of their product development and will make alicaforsen market-ready for the treatment of IBD pouchitis which currently has no approved treatments.

So far in this series we’ve discussed 2 of my 3 recommended first steps for starting your pitch in a way that makes investors instantly grasp the value of your idea.

Third up is the natural corollary of the problem, that is, the solution.

Tip #3 “How do you scratch that itch?”

Once you’ve made the effort, as set out in Proposal Tip #2, to give a cogent explanation of the problem, and the investors have started to relate to the pain point, then you hit them with your solution.

How you do this will depend hugely on what your solution is, but the key point is to make it super clear. No one will understand your solution as well as you do – so don’t expect them to. Set out your explanation in as simple as possible terms as if explaining to a total novice.

Entrepreneurs often make the mistake of being too technical at this stage under the mistaken belief that if they sound like a genius then the prospective investor will fall head over heels and want to invest.

Wrong.

If someone doesn’t understand your idea quickly they’ll look elsewhere for an idea they can understand and relate to quickly.

You’ve been warned for this week…

Some very exciting news in this morning about one of the companies we raised money for last year. BIG news! Unfortunately, I’m not allowed to disclose anything yet, so will have to announce when permitted in a later post…so watch this space.

Anyway, I’m sure you’ve all been on tenterhooks waiting for the second in my series of 52 quick proposal tips. The wait is over…

Tip #2 “What Itch do you Scratch?”

Last week’s tip recommended grabbing investors’ attention by starting your pitch/proposal with your company’s most impressive achievement or traction metric to date. But what next?

You’ve hit them first with some proof and validation, but now you need to make the explanation of your concept as concise as possible. Remember, you no doubt understand your business extremely well, but you cannot expect prospective investors to have the same level of understanding. So what’s the best way to articulate your concept clearly?

Generally, we encourage entrepreneurs submitting a proposal on Angel Investment Network to start with the problem. What real world problem do you solve? What itch do you scratch? What pain do you alleviate?

If I were the Founder of Uber when starting out, my proposal would start by setting out the problems that people who want a taxi face e.g. long waits, high fares, needing to have cash etc…

If you do this well, you will get investors nodding along as they begin to see the value of your concept as they relate it to their own lives.
That’s all for now. I’ll cover the next step next week…