A word that angels often use to describe someone who is investable is ‘authentic’ – and what may be surprising is that this usually means it’s OK to own up to your shortcomings. Cruickshank, for one, is turned off by people saying: “I can do everything”, when she strongly suspects that they can’t. “If they are 110%, full on, ‘This is brilliant, I’m brilliant’, that’s not going to cut it,” she says. “That’s not real life.”
Rashid Ajami, who raised £4.1m of development capital for his student community platform Campus Society, agrees: “Securing investment is definitely not about proving you’re too good to be true,” he says. “If you had the complete package right now you likely wouldn’t need any investment. Paint a real picture of where you are and where you want to go and talk about what’s possible with the right investment in place.”
Long and challenging road
Sean Mallon was already a successful businessman when he hit the road in search of £1m in funding for a new venture named Bizdaq – an online marketplace for buying and selling businesses – in 2013. Instead of angels falling at his feet, the path was a long and challenging one. “It took over 12 months,” he says. “Getting investment isn’t pretty and it definitely toughened me. You go in thinking everyone’s going to be nice and cuddly but it can be brutal.”
Most criticisms of Mallon’s idea came with a silver lining. The angels’ comments drove him to make changes to his pitch that would ultimately make him investable. “By the end, the articulation of my plan was more refined and I became much clearer in how I was going to achieve my goal,” he says.
In fact, he adds, the original backer who ultimately invested in Bizdaq often tells Mallon that he was more sold on him as an entrepreneur than he was his business idea – proof, if more were needed, that it is faith in the individual that usually seals the deal. Says Mallon: “He tells me he believed enough in my vision that I would do it.”
Four ways to get angels onside:
Share your passion: “Yes, you need a great product, interesting idea and a practical business model,” says Rashid Ajami, “but the passion to deliver something you believe in is paramount.”
Don’t be afraid to think big: “One thing I see often is that businesses don’t raise enough money,” says Michael Queen. “It gets used up quite quickly and they spend the rest of their life raising subsequent rounds of capital.” He says there will certainly still be investors in the room when you’re asking for £500,000 as opposed to £150,000.
Practise your pitch: “And really understand your key data, too,” says Fiona Cruickshank. “When people don’t know the numbers it feels like you haven’t got the whole package.”
Know your limitations: “It’s OK to say that you know most of the answers but that you want someone on board who can help you find some of the solutions,” says Sean Mallon. “For most angel investors, the idea of being able to add value beyond cash is quite exciting.”