Are You Ready?

September 23, 2010 | Comments | Uncategorized

I talked to the chairman and president of an angel group the other day about his organization, a relatively small angel investment club east of Oakland California.

Like many investment groups, they have a defined process for submitting a business opportunity to members. Business plans are reviewed, and those owners whose plans are selected are offered the opportunity to present to the screening committee. Those who are successful with the initial presentation are invited to present the entire membership – no more than 20 minutes with Q&A to follow.

They evaluate investment opportunities by looking at the management team, the market opportunity, the use of proceeds, the growth potential, the competitive advantage(s), the fit with the groups strategic objectives (they prefer local investments that bring jobs to their community), the products and services, and the exit strategy.

What isn’t described on the website is what generally happens after the presentation to the larger group. While investment decisions are made individually, members interested in one of the opportunities get together to discuss the pros and cons, and the strengths and weaknesses of the investment.

They collaborate.

Here’s what that means to you: you need to be ready to address several investors who will combine their experience and intelligence to ask very probing questions. It is much tougher than talking to just one potential investor at a time. And the leader of the group has a PhD from MIT. When he has a question about technology, he turns to his colleagues and fellow professors. He undoubtedly has connections throughout the MIT alumni organization and up and down Silicon Valley to draw on when he needs them.

In addition to having a great business concept and a great team, it takes great confidence and poise to stand up to that level of sophisticated review.

Are you ready?

Questions: Are you preparing to submit your plan to angel investors? Are you ready to talk to some of the sharpest minds in the world about your business?

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