When you are making a pitch & ultimately getting angel investors on board with your company, its important to know who you are dealing with and what their motivations are.
During a general pitch presentation to a room of angels, you will not be able to know much about who you are pitching to or what each person’s background is. So you will have to keep your pitch suitable for a broad audience. Don’t assume they will have knowledge of the industry your company operates in. As you work with angels interested in investing in your company, you will have the opportunity to get to know them better.
This is important to do as you want to ensure their motivations & expectations are in line with what you have in mind.
So at the risk of over-generalizing, here are some profiles of angels & their potential motivations.
Cashed out entrepreneurs that have started & sold their own company. They know how to build and run a business. They may be looking for their next opportunity and want to get involved on the management team or board of directors.
Professional service providers such as lawyers or consultants that provide services to companies. They may be looking for early stage companies to get involved with so they can grow with them and provide increased services once the company gets more mature.
Doctors that may be interested in funding companies that are advancing technologies in their field.
Business people interested in funding companies that help work towards a cause they are interested in such as environmental friendly sources of energy.
Corporate executives looking for early stage companies that can provide a new product or service that can help the corporation they work for.
At the end of the day, all angels are investing since they want a class of investment they can participate in that offers a chance at a high return (with the downside of high risk).
However, there are wide ranges of preferences for what role angels see post investment. Some want to be actively involved in helping grow the company while some would rather be passive and be hands-off.
It is also important to be on the same page in terms of expectations of exit and investment return. The main point is to ensure you understand your investors expectations and the role they want to play in your company post-investment so you can properly manage to it.