Seven easy ways to scare off an angel investor

April 22, 2016 Comments Off on Seven easy ways to scare off an angel investor

I’ve been an angel investor for nearly two decades. While the investment climate is highly dynamic, what’s unchanged is that pitching to angels is always a challenge – we’re often skittish and faddish at the same time (just like venture capitalists, by the way).

During the past 20 years, I’ve read and heard more presentations than I can keep track of. There are probably 500 ways to chase away potential investors (and probably 5,000 articles and blog posts about what not to do), but in my experience, here are seven of the most effective ways to guarantee a ‘no’.

  1. Insist that there’s no competition
  2. Ask for nice, even, round numbers – with no logical linkage to your budget or sales projections
  3. Make overly optimistic behavioral assumptions for your customers
  4. Casually describe all of your hobbies and side-projects

  5. Paper over intellectual property and regulatory issues

  6. Point out that you’re building a business to hand down to your children

  7. Counter an investment offer with non-standard terms

I’ll be describing these observations in future posts, so stay tuned if you’d like to learn more.

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