It is truly exciting to finally get a meeting with the angel investor you were in talks with for a while. However, it is vital to keep your cool and act smartly. Here are five things you should not do when meeting with an angel investor.
Don’t Act Too Soon
Raising capital is not as hard as it was in the old days. Therefore, you need to understand that taking on an investor who isn’t the right fit for your business can hurt your company big time. Choose wisely and don’t accept the first offer you receive. Wait till you find an investor whose skill set complements yours or the company. If you’re offering new technology, you should get someone with experience in the technology business.
Don’t Be Concerned About Correctness of Projections
As you are preparing your pitch for the angel investor, it is important not to stress too much about the financial projections. Most of the time, the numbers you present are going to be wrong. If they were correct all the time, a lot more investments would have been profitable.
When meeting with an angel investor, your main objective is to show the decision-making process behind how you will efficiently use the money.
Don’t Discuss Market Size
Often, people will mention the size of the industry they are dealing with in their meeting with an angel investor and how they only need a few percentages of the market to make a ton of money.
This is not a good idea since most investors are already aware of the industry’s size and don’t want you telling them how big it is. Moreover, your investor may not want to work with someone who’s satisfied with targeting just a fragment of the industry.
Don’t Ask for Funds
A meeting with an angel investor does not guarantee funds. It’s a process that takes longer than just a single meeting. You must make a relationship with the angel investor just like you would when selecting a significant other.
Requesting funds at the first meeting with an angel investor is like asking someone asking you to marry them on the first date. Although there is a slight chance you are successful, you will likely squander the opportunity.
Don’t Pressure the Investor
While meeting with an angel investor, the biggest mistake you can make is to pressure the investor by telling him about other offers you have on the table. The immediate response to such a question is the investor asking why you did not take those offers. Even worse is that it can give you a bad rep among the close-knit private equity community.
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