What’s the point of a proposal? Why use sites like Angel Investment Network? Why not just send your full business plan to people you want to invest?
Well, for a start, not everyone has the contact details of a large number of investors just sat in their inbox. Networking/Connection sites like Angel Investment Network hold the key to advertising your latest business venture to thousands of prospective investors so that you can find the right ones to suit the nature of the project. That sounds a little sales-y, I know, but it’s important to understand in order to realise the significance of the short proposal instead of the full-blown business plan.
When you’re marketing an idea to thousands of people, not just in the fundraising community but anywhere, you cannot simply take it for granted that people will actually take time to consider your idea; in any marketplace thousands upon thousands of ideas are competing to grab the attention of the onlookers. Precedence is not always, and certainly not necessarily, defined by merit, but rather by the ability to capture attention.
Don’t think ‘I know my idea is brilliant, so why wouldn’t investors read my business plan? They’d be stupid not to…’ That attitude will help you raise the square root of nothing. Think instead ‘How can I make it so that investors literally cannot wait to get their greedy paws on my business plan and start properly digesting my idea?’
Here’s where your short proposal comes in. It is meant to be pithy and concise. Something that can be easily understood and result in them wanting to know more. It is the first rung on the ladder towards them investing; and that can often be the hardest part – getting them to step onto the ladder. Once they’re on, of course some may fall off on the way to the top, but at least you’re beginning to win them over and it becomes progressively harder for them to get off.
As such you should consider your proposal as a ‘hook’, to use Nir Eyal’s term, or in internet-speak a CTA (call-to-action). In your proposal make them love your idea enough to take the next step. Tell them the best bits. Don’t swamp them in superfluous detail.
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…
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.
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…
Renowned entrepreneur and angel investor Guy Kawasaki says a pitch only needs 10 slides. This infographic shows which slides you should include when trying to grab angel investors’ attention, make them want to find out more and hopefully write a cheque.
This infographic explains each component of an elevator pitch to ensure you hit the highs and provide all the necessary information.
What’s your top tip for entrepreneurs pitching to investors?
Angel investor Dave McQueen give his top 3 tips on how to deliver a perfect elevator pitch.
Nathan Gold, founder of The Demo Coach, and Scott Case, co-Founder and CEO of Startup America Partnership, discuss a wide range of pitch do’s and don’ts. Watch as they provide live feedback on pitches from several startups.
Learn 7 crucial steps to create your rock-solid business plan and head for startup success
You have a powerful idea for the next big thing, but before you sell it to anyone, you have to get it all down on paper. It’s time to make a business plan. How do you know if you’re headed in the right direction? Washington State University created an infographic that provides 10 guidelines to help prospective entrepreneurs organize their thoughts and wow potential investors.
What’s your Number 1 business plan tip?