We learned a lot about angel investors and some of the different statistics regarding them when we had our guest speaker, Fran Waller, come and talk to us in class. Within the lecture, as we’ve heard many of times in class, he mentioned the idea that startups fail. He stated that 50% of investments for angel investors fail, 30% of them break even, and 20% of them make a return greater than 1X the investment. This was very similar to the idea that we discussed in class, but just at a larger scale. Angel investors have much more money, which is why startups look to them for help in growing their business, and this allows them to take more risks with their money.
The biggest thing that I took from the lecture was that he emphasized to us was the importance of an “elevator pitch” for your business. He gave us an example an elevator pitch he used in a presentation he gave to his class over at Lehigh and we discussed the different aspects of the pitch and what should be included and what can be left out. In began his pitch by presenting the issue(s) that his company helps to solve, followed by a brief description of what exactly the company did, and wrapped it up with a simple, incentive-based question to really pull the crowds interest. The simple question he concluded his elevator pitch was, “Would you be willing to transform your Styrofoam cup into cash?” That question alone could garner so much attention and interest from a crowd just by itself. So once presenting a short, well informed pitch that may already gain their attention, the question just becomes the icing on the cake.
The other thing I took from the lecture were the costly mistakes by entrepreneurs that Fran talked about. The mistakes that he introduced to us were: the inability to explain in 2-4 minutes what their product is and the problem it solves, the fact that some have not put their own money into the startup, talk about a demo but not actually show it, over estimating the market size and revenue projections, and that they don’t convey confidence. A few of these surprised me more than others. I was very surprised that some entrepreneurs fail to put their own money into their startup as well as not conveying confidence. If you’re looking to start up your own business, you’ve got to be passionate about the idea, so to not be willing to put your own money into it is kind of mind boggling to me. Also, if you’ve established enough of a startup and are ready to take the next step to acquire money from an angel investor, its surprises me that one could not showcase their idea to the group with confidence.
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