business plan for angel investors samples

How to Write a Business Plan for Angel Investors

If you are starting a new business or expanding a current business, angel investors will be an important source if you are seeking funding. Angel investors are individuals or accredited investors who invest their own money in businesses they believe have a high potential for success.

Do Angel Investors Need a Business Plan?

The vast majority of angel investors will want to see a business plan before they invest any money in your business. A business plan is a document that outlines the goals and objectives of your business, as well as how you plan on achieving them.

While you may be tempted to skip this step, it is important to remember that angel investors are not just looking for interesting businesses;  they are also looking for businesses with a compelling business plan and a team that can execute on it.

Writing a Winning Business Plan for an Angel Investment

To attract angel investors , you will need to write a solid business plan that outlines your company’s potential for growth and profitability. The following sections should be included in your business plan:

Executive Summary

The executive summary is the most important part of your business plan, as it is the first thing that angel investors will read. This section should give a brief overview of your business, including your company’s mission statement, products or services offered, target market, and how you plan on making money.

Company Overview

This section should provide more detailed information about your company, including your company history, business model, and any unique selling points that make your business stand out from the competition.

Industry Analysis

In this section, you will need to provide an overview of the industry you are in, as well as how your business fits into the industry. You will also need to discuss any trends affecting the industry, and how you plan on taking advantage of them.

Customer Analysis

To attract angel investors, you will need to show that you have a clear understanding of who your target customers are and what needs they have that your products or services will meet. In this section, you should outline your key customer segments and their core needs and define the size of your target market.

Competitive Analysis

In this section, you will need to provide an overview of your competition and how your business plans to differentiate itself from them. You should also discuss any competitive advantages you have, such as a unique selling proposition or a first-mover advantage.

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Marketing Plan

Your marketing plan should outline how you plan on reaching your target market and promoting your products or services. This section should include information on your marketing strategy, advertising and promotional budget, and sales forecast.

Operations Plan

This section of your business plan will outline how your business will be operated on a day-to-day basis. It should include information on your manufacturing process, distribution channels, inventory management, and warehousing.

Management Team

In this section, you will need to provide an overview of your management team and their qualifications. You should also discuss how your team is structured and how they plan on working together to achieve your business goals. Many angel investors will want to see that you have a strong and experienced management team in place before they invest.

Financial Plan

The financial section of your business plan is one of the most important parts, as it will show angel investors how you plan on making money and how much return they can expect on their angel investment. This section should include your income statement, balance sheet, and cash flow statement.

The appendix of your business plan should include any additional information that you think would be helpful for angel investors to know, such as market research reports or detailed financial projections.

By following these tips on how to write a complete business plan, you can increase your chances of attracting the funding you need to start or grow your business from angel investors or angel groups.

What Do Angel Investors Get In Return?

One of the most common questions entrepreneurs have when seeking angel investment is: “What do angel investors get in return?”

In general, angel investors expect a higher return on their investment than they would receive from traditional investments in stocks and bonds. By getting a percentage of equity in your company, a percentage of future profits, or a combination of both, they can possibly earn larger returns, which are commensurate with the increased risk of investing in a nascent, non-liquid company.

Angel investors also typically get preferential treatment when it comes to items like board seats and veto rights. This means that they may have some say in how the company is run and can veto decisions with which they don’t agree.

For these reasons, it’s important to make sure that your business plan is compelling and shows how you plan on generating a large return on investment for your angel investors.

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What to do before seeking investors

Angel investment funding explained, venture capital funding explained, investor templates and tools.

How to Get Venture Capital and Angel Investor Funding

Securing angel investment or venture capital (VC) funding can be a game-changer for growing businesses. However, these forms of investment are often challenging to obtain due to their highly competitive nature. So what does it take to access these funding opportunities?

In this comprehensive guide, we’ll cover how to prepare for outside investment along with the intricacies of angel investment and venture capital. Let’s prepare you to connect with investors and get the funding you need to accelerate business growth.

Investment from angel investors or venture capitalists is rare for small businesses. If you believe you have a shot at landing this type of funding, here are the things you should consider beforehand.

Write a business plan specifically for investors

Did you know that you can fine-tune your business plan to better resonate with investors? Here’s what you should focus on to really show your business is worth investing in.

Be aware of what investors want to see from a business

What does it take to attract interest from investors? Here are five things they’ll pay close attention to.

Calculate your initial business valuation

What’s your business worth? What will it be worth if you hit your growth goals within the next year? You need to have a sense of your value in order to confidently approach investors and ask for funding.

Determine how much of your company you will offer

You’ll likely have to give up a piece of your company when pursuing investment. It’s worth nailing down how much you are willing to let go before you ever start reaching out to investors.

Learn how to find alignment with investors

Are you and investors seeing eye to eye? If not, you may soon see decisions and actions from your new funding source that don’t match up with your expectations.

Know the differences between angel investors and venture capital

While angel investors and venture capital firms share a lot of similarities, they are far more different than you may realize. Be sure you understand the differences in order to understand what option is best for your bu…

Understand how to negotiate an investment deal

It can be intimidating to rebuff an offer from seasoned investors and present a counteroffer when funding is on the line. However, in order to get the best deal possible you need to know how to negotiate.

Recognize what to watch out for when signing a contract

The pitch and in-person negotiation is only the first step. You’ll also need to be ready to review your contract and ensure the terms match up with your expectations.

Be prepared to handle rejection from investors

The unfortunate reality is that you’ll likely hear “no” more than you’ll hear “yes”. The key is to not give up and take it as a learning experience to refine your next attempt.

Understand how to maintain a capitalization (cap) table for investors

A cap table is simply a spreadsheet or other document that shows who owns how much of your business. This will become necessary if you take on investments or partners.

An angel investor is typically an individual or group that has spare cash available and is willing to provide capital for a promising start-up or business expansion. They often invest much smaller amounts than venture capitalists and are willing to do so for businesses in earlier stages of growth. 

Check out our selection of resources to help you prepare to connect with these types of investors.

How to land funding from angel investors

What does it take to successfully get funding from angel investors? Check out these tips from seasoned investor and business planning expert, Tim Berry, to improve your chances.

Questions angel investors will ask

There’s nothing worse than preparing to pitch to an investor and being asked a question that you don’t have a good answer to. To help you avoid that issue, here are some common questions angel investors will ask.

Common myths about angel investment

With angel investment being so rare, plenty of rumors and exaggerations have become embedded in entrepreneurship culture. Here are the five most common to be aware of.

What you can learn from angel investors as a business owner

Funding is often the first priority for business owners. But an incredible and under-appreciated benefit of working with angel investors is the opportunity to learn from their experiences.

Optimize your business website to attract investors

Struggling to connect with investors? Make them come to you (or at least make a good first impression) by fine-tuning your business website.

Angel investor blogs you should be reading

While this guide is an excellent starting point, there are other great resources out there that dive into greater specifics around angel investment. While not as active as they once were, these are still some of our favo…

Venture capitalists are investors or firms that provide capital for businesses with high growth potential. Unfortunately, this type of funding only accounts for less than 1% of funding for US businesses. But, if you have a strong initial interest in your business and a solid roadmap for fast-growth or potential growth into a large company—you might want to consider it. 

Check out our growing selection of resources to help you out.

Pros and cons of venture capital funding

The promise of higher amounts of funding is a great reason to pursue funding from venture capitalists. However, there are some drawbacks that you should be aware of.

Venture capital blogs you should be reading

Want to get the inside scoop on what venture capitalists care about and are focused on in the near future? Check out our selection of some of the best venture capital blogs to regularly visit.

Books you should read to prepare for venture capital funding

Looking for a good book that can also help you improve your chances of getting funding? Check out our selection of books to prepare you to go after venture capital funding.

Resources to help you prepare to pitch to venture capitalists and angel investors.

Free business plan template

Showcase your business structure, performance, and potential with a detailed business plan that includes everything investors expect.

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Free pitch deck template

Impress investors with visuals to back up your business plan and showcase your potential growth.

Confidently pitch your idea to investors with LivePlan

Create and share your plan, pitch, and financial forecasts with a single powerful tool.

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Venture capital and angel investors FAQ

What does venture capital do?

Venture capital is a form of private equity financing for startups and small businesses that display high growth potential. It often includes funding, industry knowledge, strategic guidance, and networking in exchange for a percentage of business ownership.

What is angel investment?

Angel investment is funding provided by affluent individuals, called angel investors, to startups or entrepreneurs in exchange for ownership equity or convertible debt.

What is an example of venture capital?

A notable example of venture capital is Sequoia Capital’s early investment in Google in 1999, which significantly aided Google’s growth.

Is venture capital good for small businesses?

Venture capital can be beneficial for high-growth potential small businesses, providing funding and strategic advice. However, it often involves relinquishing equity and control, as well as a required and predetermined exit from your business by either selling it or initiating an IPO.

How do you ask for funding from angel investors?

Seeking funding from angel investors involves presenting a solid business plan, a persuasive pitch deck, and being clear on funding needs. Researching suitable angel investors before reaching out is essential.

Who provides venture capital to small businesses?

Venture capital for small businesses is usually provided by venture capital firms, which manage pooled funds from multiple investors. Some corporations, wealthy individuals, or groups of angel investors may also provide venture capital.

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Business plans for vc & angel investors, a well-developed business plan is essential for securing venture capital and angel investment, from the seed round to series a and beyond..

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Securing the investment you need starts with an outstanding business plan, a well-written document isn't enough to impress today's seasoned investors..

Your business plan should clearly convey the problems faced by your target customer and how you intend to solve them, highlight your market opportunity, and demonstrate scalability and profitability.

For over two decades, Masterplans has specialized in creating investor-focused business plans tailored to the evolving demands of venture capitalists , angel investors, family offices, and private equity firms.

“It’s always a good investment to work with Masterplans, whether it’s [for] a VC firm or an angel investor.

It’s being wise about your time, energy, and money. it's a no-brainer.".

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For startups or companies seeking to scale, securing investment requires a business plan that presents precise information that's written in the investor's language. This includes evidence of your company's growth potential, alignment with industry trends, and a solid foundation built on an innovative business model .

At Masterplans, our tried and true business planning process allows us to translate your vision into a compelling narrative, allowing you to focus on building your business.

With a business plan from Masterplans, a business owner can approach multiple investors with confidence, knowing that your plan exceeds the expectations of savvy investors .

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Key Sections of a Business Plan for VC & Angel Investors

Each section is structured so venture capitalists & angel investors can easily find what they need, while ensuring a cohesive, consistent, and comprehensive overview of your venture..

Executive Summary

The Executive Summary provides a concise yet compelling snapshot of your venture , ensuring investors immediately grasp its potential and viability. In addition, it lays out the investment proposal based on industry-standard valuation methods. While an Executive Summary should be able to stand on its own, it should leave a potential investor wanting to learn more.

Company Overview

The company description is pivotal in illuminating not just your business model and details on your products and services, but also your revenue model — how you intend to monetize these solutions. This section will also shed light on the distinct problems your offerings solve for the customer, articulate your unique value proposition and mission statement, and outline your day-to-day operations plan for a holistic understanding of the venture.

Market Analysis

Masterplans utilizes industry-leading market research tools , including Statista, IBISWorld, and Esri's Business Analyst, to offer a comprehensive market analysis and competitive analysis. These tools guide us in identifying your competitive advantage in the market landscape. We illuminate metrics vital for investors, such as the size of the target market and your projected market share. Moreover, this level of market research translates directly into developing your marketing plan.

Strategy & Implementation

Partnering with Masterplans equips you with a straightforward and actionable strategy that clearly details how your business will achieve its business goals and outperform competitors. We outline how your business will attract potential customers by crafting a robust omni-channel marketing strategy. In addition, a good business plan for investors will discuss the promotional, sales, and customer experience strategies that will transform your startup into a thriving enterprise.

Management Team

Your Management Summary will emphasize the strengths, expertise, and experience of your leadership. This goes beyond mere titles; it delves into the importance of business administration in shaping strategic decisions and the pivotal role of human resource in crafting a company culture and building a cohesive team. By showcasing the individuals who drive your business , Masterplans ensures that prospective investors understand the depth of capability and commitment behind your venture.

Financial Projections

Masterplans will develop a detailed five-year financial plan with realistic financial projections based on industry benchmarks . This includes an income statement, a cash flow statement, and z balance sheet; each financial statement is instrumental in showcasing your business's potential profitability. Through a unit-driver-based financial forecast, we underscore the robustness of your startup, providing a potential investor with a clear picture of its financial viability.

“ I highly recommend Masterplans to help prepare for a capital raise. My business plan was focused and polished. 

I’m happy to say we raised our seed capital of $3 million [and later a $10.2 million series b] and added three strategic board members to our team. ”.

Yenvy Truong Founder, HealthSnap

Going Beyond The Business Plan

Polished deliverables make for a stronger pitch, in addition to developing a comprehensive startup business plan, we also offer a suite of customized materials designed to maximize your impact with venture capitalists and angel investors..

A business plan is only one part of a strong investor proposal; a standout pitch deck is your foot in the door. From a custom designed one-pager to a stand-alone executive summary, we ensure every piece of your pitch arsenal is sharp and impactful.

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Our latest investor-ready projects, for over 21 years, we've had the privilege of collaborating with clients across every industry. below are just a few of the 18,000+ business plan projects we've worked on..

TEAM MEMBER SPOTLIGHT

Morgan hrejsa, vp of plan development, since joining masterplans in 2008, morgan has specialized in creating business plans that investors take seriously..

She digs deeply into industry trends and competitor activities, ensuring each business plan is both factual and compelling. Utilizing specialized tools like ESRI software for demographic insights, she translates data and research into a narrative that adds a layer of depth to the business plans we develop. 

Meet The Team ›

 angel & vc investor business plan faqs,  we've compiled a list of frequently asked questions to provide clarity on our service and process. if you don't find the answer to your specific question here, please don't hesitate to contact us ., how is the cost of a business plan for investors determined.

Our pricing is influenced by several factors including industry type, plan length and scope, variables like multiple physical locations, the intended audience, and your timeframe.

Our investor plans typically range from $3,500 to $15,000, based on complexity and the team members required. This fee covers an in-depth discovery process, detailed research, professional writing and editing, and advanced financial modeling. We are happy to provide a complete scope of work for your project, free of charge, in as little as 24 hours. Simply contact us to set up an appointment.

For more information about what is included in our engagements, please see our pricing page .

Is a full business plan always necessary for investor pitches?

No, not every investor opportunity necessitates a full, traditional business plan. However, every venture does demand thorough planning and clear communication. Remember, investors aren't just buying into ideas; they're investing in opportunities. With many investors engaging earlier in the process, the requirements can vary. For instance, if you're seeking pre-seed or seed round funding to develop a Minimum Viable Product (MVP), a compelling pitch deck paired with a straightforward cash burn model detailing the investment usage might suffice.

However, part of raising capital in every case is being able to speak to all the components of your business plan, so it's highly recommended that you engage in a diligent planning process even if the prospective investor won't ask for the physical document. Every investor has unique requirements, so it's crucial to be well-prepared.

At Masterplans, we prioritize your unique goal over one-size-fits-all packages. We're always ready to delve into your project specifics and offer a tailored quote that aligns with your individual requirements.

You can check out our stand-alone pitch decks and investor materials here.

How many pages is an investor-ready business plan?

The ideal length of an investor business plan is precisely as long as it needs to be, and not a page more. While most investor business plans fall within the 40-60 page range, with around 15 pages dedicated to presenting the financial statement, it's essential to remember that quality isn't determined by page count. Evaluating a business plan's merit based solely on its length misses the true value and depth of its content.

You can see some examples of our investor business plans here .

How long will my business plan project take?

Our projects kick off within 24 hours of hire. From there, the timeline largely depends on your pace and preferences. Some clients prefer a more deliberate and procedural approach, while others are working against tight deadlines. Typically, we can deliver a complete first draft of the business plan within two weeks. We offer both 45-day and 90-day engagement timelines, ensuring ample time to integrate your feedback and steer the direction of the project.

You can learn more about our process and timeline here.

Do you guarantee funding, or accept payment after funding?

Masterplans does not guarantee funding. However, our clients are up to 24x more likely to get funded than industry average because we provide a top-notch business plan that positions them in the best light to potential investors. Payment terms are discussed upfront, and payment after funding is not a typical arrangement.

Will you help find funding?

While Masterplans specializes in creating investor-ready business plans, our firm does not directly assist in securing funding. Receiving compensation for fundraising without registration as a broker-dealer with the Securities Exchange Commission (SEC) is unlawful. Our emphasis is on crafting a compelling business plan for clients to present to prospective investors.

Here are some tips on how to build an investor funnel .

Can an investor business plan be used for a bank loan?

While investors and banks have different priorities and risk profiles , there are circumstances where a business plan intended for investors can be adapted for a bank loan application. Bank lending, particularly loans backed by the Small Business Administration (SBA) usually focus on a more stable, small business that will contribute to the local economies, and therefore seek conservative financial models and less risk. Investors, on the other hand, often look for high-growth potential and are willing to assume greater risks for the possibility of significant returns.

Despite these differences, there are special cases where both types of financing can co-exist, notably when real estate is involved as part of the capital stack. In these scenarios, Masterplans has the expertise to modify an investor-focused business plan to meet the specific requirements of a bank loan application effectively.

Do you use an investor business plan template?

Each venture is unique, requiring a bespoke approach to business planning. While we don't adhere to a one-size-fits-all "investor business plan template," our extensive experience affords us the ability to construct investor-focused plans efficiently. Leveraging our repository of knowledge and best practices, we strike a balance between customization and efficiency, delivering a plan that speaks directly to investor needs and expectations.

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Appendix C: Angel Investment

“The more angels we have in Silicon Valley, the better. We are funding innovation. We are funding the next Facebook, Google, and Twitter.”

– Ron Conway, well-known Silicon Valley angel investor

Sometimes a person buys a share in a business in order to contribute to the business, help run it, take a salary perhaps, or share in the profits, but not necessarily to sell the ownership in a few years. That’s not angel investment. And when your rich aunt gives you $25,000 to start a business, that’s friends and family investment if she then owns a share of your company; and generosity and family spirit if she doesn’t.

You don’t pay investors back. You make your business worth more so they can sell their shares to somebody else to get a return, at exit.

There are books for angel investors, books about angel investors, and books about how to secure angel investment. There are also several well-known angel investment platforms. The website at gust.com is a platform for angel investors and entrepreneurs to share information, and it has a wealth of information about angels, in videos and articles. The Angel Capital Association ( http://www.angelcapitalassociation.org /) has directories, definitions, lists, and explanations. You can also check out AngelList and do a web search for “angel investors.” This chapter is a short summary. I’m including it because I’ve had a lot of experience with this topic, and it relates well to lean business planning.

Angel investors generally focus on seed money – early investment for startups at early stages of growth – for amounts less than $1 million. Several experts have different definitions of angel investment, on how many angel investors exist, and how much money they invest. As I write this in 2015, the latest available statistics come from 2013. Approximately 300,000 angel investors did 71,000 deals with startups, mostly for seed financing and early stages.

Legally, Angel investment is people who are accredited investors as defined by the U.S. Securities and Exchange Commision (SEC), which sets wealth criteria:

Either earned income that exceeded $200,000 (or $300,000 together with a spouse) in each of the prior two years, and reasonably expects the same for the current year; OR has a net worth over $1 million, either alone or together with a spouse (excluding the value of the person’s primary residence).

Those rules were going to relax with the Jobs Act of 2012, which people would open the gate to crowdfunding, but hasn’t yet (see below, on crowdfunding). Startups looking for investment are still going to angel investors pretty much the same way they have for several decades. And angel investors are still mostly wealthy individuals, often with tech industry background, often former entrepreneurs whose former endeavors succeeded. There are listings of angel investors on the web, and gust.com lists more than 600 groups of angel investors operating in the United States and elsewhere.

Angels vs. Venture Capital vs. Friends and Family

First, I see this confusion a lot: People use the terms venture capital , venture capitalist , and VC  to apply to any outsider investing in a startup.  However, it’s useful to draw some distinctions in this area, between three important classifications: venture capital, angel investors, and anybody else.

Venture Capital

Venture capital means big-money investment managed by professional investors spending other people’s money. The money comes from extremely wealthy people, insurance companies, university endowments, big corporations, etc. Think of Kleinert Perkins et al., First Round, Softbank, Oak, etc. Venture capital usually comes in millions of dollars. Over the last few years, Venture Capital has moved towards larger investments for companies further along the business growth cycle, and away from smaller investments for true startups.

The most important distinctions between angels and VCS are:

• Angels invest their own money; VCs invest other people’s money.
• Angel investment is much more likely to be in hundreds of thousands than in millions of dollars.
• Aside from those two distinctions, it is generally true that VCs will be more rigorous in studying (called “due diligence”) the investment before they make it. Both angels and VCs will have similar processes for looking at summaries, then pitches, then business plans.

Friends and Family

Anything else is called “friends and family,” which really means “not VC” and “not angel investment.” The laws on investment allow a few so-called friends and family, but there are limits. The intention of all the regulation in this area is to prevent the kind of stock frauds that were rampant during the Great Depression.

Is Your Business a Candidate for Angel Investment?

Angel investment is an option for a small minority of startups that combine the right factors. There are always exceptions to the rule, but in general, to be interesting to angel investors, a business has to have at least these four qualities:

• Attractive potential growth in sales. Think of big growth, like from zero to $5 million annually, or even better, $10 or $20 million annually, in three to five years. Nobody can predict the future, but angel investors pride themselves on being able to make good guesses. From the entrepreneur’s side of the table, that means having a credible growth story. Numbers aren’t enough. Anybody can type numbers into a spreadsheet. You need a story, along the lines I included earlier in Lead with Stories and Stories as Strategy . Angel investors will read your story and build their own guess about the company’s potential. At that point, the numbers (market analysis, demographics, research) are useful if the story rings true. I also referred to this idea in Stories Matter More Than Numbers .
• You need to be able to grow with scale. That means your business can increase its unit sales very fast without having a proportionate increase in fixed costs, head count and marketing expenses. Most product businesses can scale larger by adding capacity to a product manufacturing process in a relatively easy fashion. Most web businesses can grow easily since it’s relatively simple to add proper bandwidth when increasing the number of users of a website or application. But service businesses often suffer the problem of needing to increase personnel to grow. Investors call it a body shop when doubling sales is possible only by doubling the fixed costs and numbers of employees; and that’s not a good thing. Sometimes service businesses will try to generate scale with franchising. But franchising isn’t credible option for angel investors until you have a very successful working first venue (or two or three).
• You need to have some way to ward off or delay competition. Investors talk about a so-called  secret sauce , or technology, patents, trade secret, or some way to erect barriers to entry. The worry is that a well-funded big company will jump in on a new business, outspend it and take away its opportunity. People talk of the so-called  first mover advantage that makes an idea defensible if the initial entrant to the market grows fast and builds its customer base very quickly. That works sometimes, but not always. Investors will use their own judgment in reviewing the idea, not necessarily what you tell them.
• You need a credible management team. Angel investors are not likely to invest in a startup that doesn’t have at least one founder who has already been involved in a startup. This is disappointing to first-time entrepreneurs, but the fact is that in startups, nothing substitutes for experience.

The Normal Process for Angel Investment

First of all, there is no normal. Angel investors are individuals, investing their own money. Many join groups that will invite startups to pitch for the group; but many operate as individuals. So what I say here is what’s common, what I’m familiar with, and what usually  happens.

It starts with an introduction. The easiest version of the introduction is a formal submission to an angel investment group, using one of the angel platforms like gust.com or AngelList .  Otherwise you ask for an introduction from somebody you know who might know angel investors: maybe a business school professor, or somebody from a local chamber of commerce. Or perhaps you attend a business event. Unsolicited emails to angel investors rarely work, but aren’t impossible. If you’re talking to a potential angel investor, keep your elevator speech  (Chapter 14) in mind, and if the occasion fits, use it.

The angel investors will look at your summaries – a summary memo sent via email, perhaps, or a business summary submitted on one of the platforms. This is what I cover in Chapter 12.

If the summary catches their attention, and they like what they see there, you’ll be invited to do a business pitch . This is what I cover in Chapter 13.

If they hear the pitch, ask questions, get some answers, and are still interested, then they’ll want to see your business plan. That usually means a formal business plan document , as in Chapter 15. However, times are changing, and many angel investors will settle for just the lean business plan after they’ve met you, talked with you, and heard your business pitch. Some kind of business plan is necessary because they want to dig into your business as part of the due diligence every conscientious investor does before making the investment.

Due diligence is a serious process that takes weeks at least, and often months. Investors need to check lots of details including legal details, contracts, deals with suppliers and distributors, important customers, technology, patents, and other things. It’s extremely rare to go from introduction to depositing a check in a matter of weeks.

What About Crowdfunding?

The term crowdfunding, when experts started using it, referred to the idea of large numbers of people investing relatively small amounts each to fund startups. It was about investing, buying shares in a startup. Over the last couple of years it’s come to refer to a wider range of possibilities, such as individuals lending money to startups (often called micro lending) and individuals pre-paying startups to pre-purchase goods or services before they are available. The most successful of the pre-purchase platforms is Kickstarter . With Kickstarter, you and I can fund a startup by promising to buy its good when they are finally available. A startup building a high-tech watch received more than $8 million in pre-purchases. I’ve bought several items over Kickstarter. My purchases were managed by amazon.com, which took my order and credit card information. The entrepreneurs building the tech devices had assurance of eventual purchases. When the devices were shipped, my credit card was charged.

Many entrepreneurs rejoiced in April of 2012 when President Barack Obama signed the 2012 JOBS act, which many thought would relax the SEC rules related to angel investment and open the door to so-called crowdfunding ,  allowing startups to take investment money from people who aren’t accredited investors. The common vision was of startups raising hundreds of thousands of dollars in investment from thousands of people.

That hasn’t happened. SEC rules have tightened. Startups have to deal with strict regulations controlling how they solicit investment funds, and from whom. I’m not going to go into legal details in this book, but please be aware that for practical purposes it takes an experienced attorney up to date on angel investment to guide you through the legal maze.

Meanwhile, states have been moving on crowdfunding, with state laws, rules, and regulations that allow individuals who aren’t accredited investors according to SEC definitions to invest in startups. In Oregon, for example – where I live – startups can take up to $250,000 investment from unaccredited investors, not to exceed $2,500 from any one unaccredited investor. As this is written, in early 2015, 15 states have opened up the possibility of crowdfunding. Limitations go up to no more than $2 million total funding through crowdfunding, with limitations up to $10,000 per individual unaccredited investor. Some of these programs are still at proposal level, and some are already available.

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How to Structure Your Pitch Deck for Angel Investors

Startup investing is a high-stakes, highly competitive business. Angel investors and venture capitalists are constantly on the lookout for the next tiny startup that could strike it big. As savvy investors, however, they’re also attuned to potential issues and red flags that could dissuade them from funding your company.

The good news is that you can stand out from the crowd and make an excellent first impression by building a great pitch deck. But do you know how to create a pitch deck in the first place?

Your pitch deck is one of the most important elements when you prepare a pitch for angel investors . In this startup pitch deck guide, we’ll discuss everything you need to know.

How do you make a pitch deck for an investor?

Your first question might be: “What is a pitch deck?” In the field of angel investing , a pitch deck is a short yet informative presentation that lays out the basic details of your company. This includes your startup’s leadership team, mission, industry, products and services, high-level financials, growth strategy, and fundraising needs.

You can think of a pitch deck like a business card for your startup, soliciting interest in your company. Pitch decks provide all the high-level relevant information that potential investors need to know during the angel investment stage.

Importantly, the goal of a pitch deck is not to help you raise money—at least directly. Rather, a high-quality pitch deck will help get you to the next step: a seat at the meeting room table, where you’ll discuss funding with angel investors.

What should be in an investor pitch deck?

The role of the pitch deck is to quickly and concisely give potential investors an overview of your business. It should explain why they should fund your startup. However, there’s more to mastering the art of the investor pitch deck .

Although every startup is different, there’s a “language” that angel investors have come to expect from founder pitch decks. Your slides should contain various pitch deck building blocks that investors are looking for.

For one, most startup thought leaders recommend including a maximum of 10 to 20 slides. This allows investors to peruse it in just a few minutes. If your pitch deck is too short, you risk omitting crucial information. If it’s too long, you risk losing the investor’s attention. Including visually appealing images, graphs, and charts will also help sustain an investors’ interest throughout the presentation.

Instead of following a “one-size-fits-all” template, your pitch deck should be customized. Create different slides tailored to specific audiences. This enables you to easily swap your slides in and out to fit individual investors.

With all that said, what should you include in your startup pitch deck? Below are the essentials for how to create a pitch deck .

• Pitch deck cover: The start of your pitch deck should set the tone for what’s to come. A pitch deck cover should include your business name, logo, and contact information. It should also include a tagline and/or visual that effectively communicates your mission.
• Value proposition: Your value proposition is a short, high-level, one-sentence summary of the value that your company provides to customers. For example, saying that your startup is “Uber for X” (i.e. providing on-demand services from a mobile app) is a common value proposition.
• Business problem: Your business problem is the issue or gap in the market that your startup aims to solve. In the rest of the pitch deck, you will explain how your company is uniquely able to address this problem.
• Market opportunity: Even with a legitimate business problem, you need to prove that there is significant demand for the problem to be resolved. This slide should discuss your startup’s total addressable market (TAM), i.e. the potential revenue opportunity for your products and services.
• Solution: This slide showcases the products and services that your startup offers. In particular, discuss how customers can use these products to address the business problem.
• Business model: In this slide, explain how your company plans to make money from your products and services. It could be subscription fees, one-time purchases, advertisements, etc. 
• Financials: Although you don’t need to include a full tax form, your pitch deck should incorporate the crucial financial models for your startup. This may include your cash flow statement, income statement, and sales and growth projections.
• Competitors: Every business has its rivals, and a careful understanding of the market landscape is critical. This slide should discuss your closest competitors and why customers will patronize your business instead of theirs.
• Leadership: This slide is the place to mention key startup personnel such as founders, co-founders, and executives like the CEO, CTO, and COO. Mentioning your credentials and previous experience helps reassure potential investors that you have the skills to back up your business vision.
• Fundraising: Last but not least, your pitch deck should conclude with  the amount of funds your startup is seeking. You should also discuss how you plan to use these funds (e.g. hiring new employees or developing a new product).

How do you pitch an angel investor?

Sending out your startup pitch deck is the first stage in pitching an angel investor. Typically, your deck should be attached to a brief message (e.g. through email, LinkedIn, or the investor’s website) that succinctly presents your case without directly asking for funding.

If your pitch deck is well-written enough to generate interest, the next step is for investors to reach out to you for a one-on-one meeting. This meeting should further build on the themes outlined in your deck. This includes the business problem, the market opportunity, your business solution and products, your financial models, etc. Put forth a concise and winning argument for investing in your startup, and be sure to leave time at the end for Q&A.

Presenting to VCs and angel investors is its own skill, and you may need to go through many presentations and meetings before you get a nibble of interest. Once an investor wants to move forward, the next step is to go through the due diligence process. During this stage, investors may assess your company in terms of factors such as:

• The competency of the management team.
• The quality of your products and intellectual property.
• The long-term potential and market opportunities for your startup.
• The underlying assumptions of your company’s financial models.
• The risks and competitors that your startup faces.
• The possible exit strategies for your startup.

Your Pitch Was Rejected? Rebounding from Investor Rejection

0 to 100 in 24 Months: How Strategic Networking Catalyzed a $110M Exit

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