Introducing an angel investor to an opportunity requires a short written summary. The elaboration of details in a business plan is presented later. First, an effective summary is required to gain investor attention by following these guidelines.
When you first approach an angel investor, you need a summary of your company and the capital you’re raising. Providing an entire detailed business plan comes later. You only have about 200 words to make your initial appeal to an angel investor.
Grab the angle investor’s attention with a compelling first sentence. Don’t write something vague or obvious. Write an opening sentence that tells the investor about your company’s focus.
For example: “ABC Company provides small industrial engines for purposes that are presently fulfilled by unnecessarily large engines of other manufacturers.”
What’s effective about this sentence? Firstly, it states what the company does. Not what the company “will do”, “plans to do”, or “seeks to do”. Use the present tense to write about your company as an existing entity. In addition, this sentence states the purpose of the product (small industrial purposes) as well as the marketing objective of the company (providing a small engine solution for situations when large engines are unnecessary).
Here’s an example of a bad first sentence: “ABC Company plans to sell engines.”
This sentence is bad because it introduces the company with a general observation. It doesn’t say why an angel investor should care about engines, such as stating that there is an unfilled need for small ones.
After getting the investor’s attention, establish the credibility of your company in three or four sentences. Explain what the company will accomplish with the investment capital. Give the angel investor a reason to invest. An example of this is to write, “Small engines are less profitable for large manufacturers. They are slowly abandoning this segment of the engine market. ABC Company profitably addresses the continuing need for small engines.”
Next, state in one sentence why your company is relevant. An example is, “There is strong demand for small engines. However, customers are presently forced by leading manufacturers to excessively pay for large engines to address small-use situations.”
In the second and final paragraph, provide details about the factors in the first paragraph. Explain what distinguishes your company. An example is, “ABC Company saves consumers twenty percent on the purchase price of engines utilized for small industrial purposes. In addition, the lower power usage to customers from using the Company’s products saves ten percent in electricity costs.”