If Passion Was Marketable, Entrepreneurs Would Never Have to Plan

Entrepreneurs are nothing if not passionate about their idea and the anticipation of launching a company based on that idea. As an angel investor, you want to see that excitement, but not at the expense of proper planning. After all, consumers won’t buy passion and you can’t use it to gauge profits and losses.

Even with the thousands of angel investors operating throughout the world, there are many more wannabe entrepreneurs seeking seed money. Time is a premium and you shouldn’t grant just anyone an audience. You should seek entrepreneurs who are able to parlay their passion into a tightly organized argument about the marketability of their product or service.

It is this step of preparation, or lack thereof, that can make or break a deal for an entrepreneur seeking to do business with you. While it is true that most angels want to back those entrepreneurs that are excited enough about their idea to invest the sweat equity necessary to see it through to sustainable profitability, proper preparation demonstrates that the entrepreneur has done their homework. If an entrepreneur isn’t prepared, don’t waste your time.

Properly prepared entrepreneurs understand what is required to get their idea off the ground, the risk associated with an investment and what you the angel expects in a presentation. Angels can put just as much importance on the appearance of the entrepreneur as they do on their presentation. First impressions do count, so don’t accept a presentation from someone who arrives wearing clothing that distracts from the topic at hand. Expect professionalism in appearance as it reflects the amount of respect the presenter has for you as the investor.

Perhaps one of the most important elements in listening to a presentation about an idea is to look for the information to be relevant. If an entrepreneur is pitching an idea for a product that will be marketed to consumers that prefer a lifestyle much different than your own, you may or may not see the promise in the venture. It is up to the entrepreneur to help you to relate to the market promise of the idea.

Even if the entrepreneur is dressed appropriately, is respectful of your time and can engage you and other angels through relation to the idea, there is still the element of preparation for the questions that are sure to come up in a presentation. Expect that the entrepreneur did the homework to determine the possibilities in all scenarios. Ask the tough questions and demand quality answers.

Perhaps the best advice that can be given to an angel listening to a presentation is to watch how the entrepreneur handles a question to which they don’t know the answer. Yes, you should expect those giving the pitch to be able to answer basic questions about the idea, the company, the market, etc. But, questions regarding future projections can come up that may be hard to answer on the fly. When that happens, you’d want the presenter to admit that they don’t know than to try to stumble through a response that really answers nothing. An honest entrepreneur is more respectful that the one that’s not.

Even if you follow all of these tips during an entrepreneur’s presentation, the entrepreneur still needs to be able to demonstrate that their idea can turn a profit. Proper preparation will speak volumes to the angel considering the idea for investment, demonstrating that the bulk of the leg work has been done and that the entrepreneur is ready for the next step.