Steph Korey is a successful businesswoman and an experienced angel investor. Speaking from her experience, Steph Korey has shared what angel investors look for in business opportunities.
Founder’s Goals and Values Align
While the financials certainly are paramount to an angel investor (see below), the founder’s own goals, values, and motivations are also of great import. In order to secure an investment, a business owner’s work ethic and overall aim must be similar to an angel investor’s. This includes everything from how much the owner works, to whether they want to run or sell their business eventually.
Business owners should be cognizant of how they portray themselves during pitches. According to Steph Korey, showing character and tenacity is important. So too is concisely and clearly answering investors’ questions, as this shows that a business owner can collaborate with others in an efficient manner.
Knowledge of the Business’s Financials
Business owners must have a strong command of their business’s financials, even if this isn’t a natural strength of owners.
Owners should be prepared to discuss past performance and future projections, and they should have real numbers for both. Any abnormalities in past revenues may need to be explained. Sales, revenues, and profit projections going forward should be realistic and defendable.
Most angel investors understand that pitching to them can be anxiety-provoking, and sometimes people have trouble thinking on their feet when they’re under stress. Investors don’t necessarily need the quickest thinker, but rather someone who knows their business well.
According to experienced investor Steph Korey, writing down numbers, either as part of a slide show or on a cheat sheet is generally acceptable. Business owners can simply explain why they have numbers written down. So long as they are still able to discuss these numbers in detail and at length, investors generally won’t hold writing things down against owners. In fact, many investors appreciate having a sheet that details a business’s financials to reference.
Definitive Growth Plan
Angel investors look for businesses that can leverage financial investments for growth. They don’t just want a business that has an amorphous future potential, but a business that has a defined growth plan that business owners can act on.
Having a plan ensures that business owners can use an angel investor’s financial contribution to accelerate growth. A plan could involve opening more locations, taking a product to market, increasing sales personnel, or any number of other tactics.
Shared Philosophical Goals
The potential financial return on investment is foremost in angel investors’ minds, but investors are people and thus have other considerations too. Many investors prefer businesses that have common philosophical goals as the investor.
For example, Steph Korey is from a multicultural childhood and likes to help underrepresented business owners. She wants to see many cultures represented in businesses, which is something that every minority business owner likewise desires.
Make Strong Pitches to Angel Investors
With these insights from Steph Korey, business owners should be better prepared to make strong pitches before angel investors. When business owners can give investors the information they want, the likelihood of an investment deal greatly increases.