Congratulations!That’s because we know you are reading this article on what goes on in the mind of angel investors because you have reached a certain stage inyour company. You have seen a lot of fellow startups crumble and disappear, but you are still strong and standing. I understand it was a hard climb to get here.
But remember that the summit is still far away. The challenges up ahead are fierceand powerful. One careless step and it’s a freefall. As if this wasn’t a huge challenge in itself, you are getting bombarded with advice from all directions.
Wouldn't it be nicer if you could know what goes on in the minds of the best angel investors in the world? Your wish has been granted.We turned to the most fundamental and crucial points that angel investorsRon Conway and Mike Maples Jr keep in mind when they look at an idea. They are the best in the business. Do not take my word for it. Just look at their portfolios on Google, Facebook, PayPal, BuzzFeed, Digg or Twitter.
When the Dumbledores of the startup world start talking, it is best to shut up and start taking down notes.
Is your idea tested for market viability?
According to Mike, top angels in the business are seeking ideas that have been tested for market viability--an essential criteria for them to even consider cutting a check.
Ideas are pretty cheap and in this age of low-cost experimentation,if you haven’tdone a single experiment or tested your product for its viability in the market, you are not going to find a place in the good books of investors. It reflects a lack of conviction on your part. If you are not convinced enough aboutyour own startup, why should an angel be?
Mikehas observed common mistakes committed by many startups over the years. Most founders want to go for lunch and discuss ideas. You do not want to be another startup doing that, right? Go test your ideas in a low-cost, low–burn and leverage-efficient way.
To give you a personal example, for an employee engagement platform, my startup tested its market viability by reaching out and offering our tool for free to HR consultants across Europe and America. Based on their feedback, we moulded and reshaped our original idea to better fit market needs.
Executive summary and elevator pitch
"If you cannot communicate your idea through writing, then you cannot get through the system," says Ron Conway.
The beauty of what Ron said lies in both its simplicity and effectiveness. An executive summary and elevator pitch are the tools in your armour to convey the power of your idea to the investor. Make it as sharp and focused as possible. Practice, polish and repeat. Mimicthe ideal writing workflow.
Investors will question you from every possible angle. You are going to see your startup idea in a different light when you attempt to answer these questions.
I am a devout believer in this point. About two years ago, Vijay Shekhar Sharma, the founder of Paytm, was asking me questions about my startup. I was able to hold on my own for the first couple of questions but got completely stumped on a question about monetisation. It was very frustrating for me. But I went back and reworked the pitch to include this point.
So keep these wordsof Mike in mind before pitching your startup to angel investors:
In life you win some, you lose some. The trick to life is to fail gracefully or sometimes even aggressively if the idea isn’t working. And, to not take it personally. Not leave any regrets in the playing field. Not everything is going to work out in life.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)