Wednesday, October 19, 2011
Pitching To Angel Investors: Focus on the core product or service
Entrepreneurs are always excited about their marketplace solutions and want to talk about it to anyone that will listen. That enthusiasm is critical to start a business because that passion is the only thing that will truly carry them through the process (It’s certainly not the money--trust me!)
Sometimes, however, that enthusiasm causes entrepreneurs to lose focus about what they are conveying as part of their product offerings.
For example, you might have ancillary services or spinoff products that are part of the plan. But cluttering the business plan with numerous potential options for the company will appear diffuse and fragmented to an investor.
It’s better to focus on the core product or service. An investor looks for purpose and clarity of focus in start ups and even early stage companies
This also solves the problem for entrepreneurs who are concerned about protecting their intellectual property. You don’t have to describe the “secret sauce” behind their product--simply focus on the benefits the product or service offers.
At this early stage, there’s no need for a non-disclosure agreement, so put that away. Most investors won’t sign one at this stage anyway, and it will only turn them off. Only in later stages will the investor need to learn more about the IP, and they will be glad to sign it at the due diligence stage.