Angel Investment Network Blog

Pivigo (https://www.pivigo.com/), a data science marketplace and training provider based in London, has announced the successful closing of its funding round with investment secured from high profile consortia including Angel Academe, Craigie Capital, Dubai-based Dunamis Ventures Ltd and London Co-Investment Fund, the Mayor of London’s early stage business fund.

Angel Investment Network is delighted to have made a significant contribution to this success story through its introduction of Dunamis Ventures Ltd. read more

What’s the point of a proposal? Why use sites like Angel Investment Network? Why not just send your full business plan to people you want to invest?

Well, for a start, not everyone has the contact details of a large number of investors just sat in their inbox. Networking/Connection sites like Angel Investment Network hold the key to advertising your latest business venture to thousands of prospective investors so that you can find the right ones to suit the nature of the project. That sounds a little sales-y, I know, but it’s important to understand in order to realise the significance of the short proposal instead of the full-blown business plan. read more

Tip #4 “How big’s the itch and is it spreading…like a rash?”

To continue the itch metaphor from proposal tips #2 and #3 (which dealt with the importance of giving a clear explanation of the itch you scratch and how you scratch it), in this post I’d like to touch on the size of the itch and how it’s growing.

For those of you beginning to find my strangled metaphor tedious, I’ll stop. I’m talking, of course, about the market your business operates/plans to operate in.

It’s no use solving a problem – even if you solve it unbelievably well – if it’s a problem only extant for a single hermit on the remote island of Tristan de Cunha, then it’s great for the hermit, but not a viable business (unless he’s sitting on pots of gold).

The problem you solve has to be one that a large and growing number of people suffer from without a solution; and are willing to pay for.

The more statistics you have to indicate this, the more prospective investors are likely to give your idea credence! There are plenty of websites available to help you with this, so don’t skip this bit…

We raised circa £350,000 for Atlantic Healthcare as part of their seed round. It’s taken a few years, but that’s nearly always the way with pharmaceuticals; and now they’ve just closed a $24 million round with funds coming from the founders of Salix Pharmaceuticals, Inc.; Fullbrook Thorpe Investments LLP (the family investment arm of Andy Leaver, founder of Clinigen Group plc); and LDC (the private equity division of Lloyds Banking Group plc); alongside their existing investors.

This round will allow them to complete the pivotal Phase 3 of their product development and will make alicaforsen market-ready for the treatment of IBD pouchitis which currently has no approved treatments.

Third up is the natural corollary of the problem, that is, the solution.

Tip #3 “How do you scratch that itch?”

Once you’ve made the effort, as set out in Proposal Tip #2, to give a cogent explanation of the problem, and the investors have started to relate to the pain point, then you hit them with your solution.

How you do this will depend hugely on what your solution is, but the key point is to make it super clear. No one will understand your solution as well as you do – so don’t expect them to. Set out your explanation in as simple as possible terms as if explaining to a total novice.

Entrepreneurs often make the mistake of being too technical at this stage under the mistaken belief that if they sound like a genius then the prospective investor will fall head over heels and want to invest.

Wrong.

If someone doesn’t understand your idea quickly they’ll look elsewhere for an idea they can understand and relate to quickly.

You’ve been warned for this week…

Anyway, I’m sure you’ve all been on tenterhooks waiting for the second in my series of 52 quick proposal tips. The wait is over…

Tip #2 “What Itch do you Scratch?”

Last week’s tip recommended grabbing investors’ attention by starting your pitch/proposal with your company’s most impressive achievement or traction metric to date. But what next?

You’ve hit them first with some proof and validation, but now you need to make the explanation of your concept as concise as possible. Remember, you no doubt understand your business extremely well, but you cannot expect prospective investors to have the same level of understanding. So what’s the best way to articulate your concept clearly?

Generally, we encourage entrepreneurs submitting a proposal on Angel Investment Network to start with the problem. What real world problem do you solve? What itch do you scratch? What pain do you alleviate?

If I were the Founder of Uber when starting out, my proposal would start by setting out the problems that people who want a taxi face e.g. long waits, high fares, needing to have cash etc…

If you do this well, you will get investors nodding along as they begin to see the value of your concept as they relate it to their own lives.
That’s all for now. I’ll cover the next step next week…

In brief, the article demonstrates that the most effective way to increase user retention, is to focus on onboarding – that first day or week in which a user is experiencing your product for the first time. By focussing on this ‘handshake’ moment not only will you retain a higher percentage of users/customers in that first day/week, but there will be a knock-on effect from this in the subsequent days/weeks; with the result that your churn will be significantly reduced across the entire user lifecycle and your revenues will have increased accordingly and significantly. Even though you only made changes at the start of the lifecyle.

Imagine two scenarios in which you are entering a hotel…

In the first, you go through the swivel doors into a silent and dimly-lit atrium across which you can just make out a receptionist slumped behind the desk. You lug your bags over to the desk gasping audibly from the effort. The receptionist does not even look up etc…You get the picture.

In the second, you go through the swivel doors into a dazzling atrium buzzing with fellow guests cheerfully chatting away whilst relaxing in comfy chairs as handsome waiters and waitresses serve them Prosecco and canapes; and have their luggage taken up to their rooms.

Obviously the second scenario is intended to create a ‘WOW’ factor. This ‘WOW’ factor is important because it creates a perspective in the mind of the customer which will set the tone for how they perceive the whole experience. In other words, the happiness created at the start will mean that the customer is more likely to use more of the various facilities and services, tip more and return in future.

So whatever business you’re in, remember you never get a second chance at a first impression; and the first impression is most important one you can make.

Co-founder of London-based restaurant startup, Grub Club, Siddarth VijayaKumar, shares how experiential marketing worked for them in this article for TechCityinsider including how Grub Club has been collaborating with Airbnb for Christmas…

Angel investment Network helped Grub Club fill their seed round and we are absolutely delighted to see them making waves alongside the big boys in the startup community like Airbnb; and winning awards like TCi’s 2015 Award for London innovator of the year.

But there is a root problem to many of these problems. And it’s a simple one: a lack of tracked data, or perhaps simply a wilful ignorance of it. Data is the only means of empirically measuring the performance of your startup and building good practices upon proven foundations. In other words, tracked data gives you actionable insights where you would otherwise be guessing. Build upon what you already know to be true and your chances of avoiding ultimate failure will be much greater.

What this means is that failing on a low key level can be invaluable for the knowledge it provides; and as such, a failure can be considered a success if you properly understand and learn from the data you receive. Knowing what not to do can thus be as important as knowing what to do throughout the early stages of your venture.

This is the important point about success and failure. Micro-failures are useful stepping stones to ultimate success provided the data is tracked and learnt from after each attempt. As Elon Musk, CEO of SpaceX and Tesla Motors, puts it; “If things are not failing, you are not innovating enough.”

This infographic, visualised from investor Paul Graham’s famous essay “The Hacker’s Guide to Investors” by Anna Vital from Funders and Founders, is your pocket guide to getting inside their heads.

What’s your top tip for entrepreneurs pitching to investors?

What’s been your business’ most successful social media strategy?