By Jack Lander

Most inventor-entrepreneurs don’t have the extra capital tucked away to finance a new startup. Borrowing money is commonly uncomfortable and maybe a little inconvenient. But as inventors we all know too well how necessary capital is to get our invention ideas into development.angel

In the higher levels of finance, such as investment banking and venture capital investing, a formal business plan is required. But at the angel level, the same business plan is long and tedious for your initial contact. Instead, the effective approach when pitching an angel investor is an “executive summary,” which should be one to three pages.

The executive summary is a highly condensed version of the full business plan. Since we aren’t going to write the full business plan from, we can be creative with the summary. Ultimately, we want to sell the angel on our invention as a potential new product that will earn extraordinary profits. First we draft a headline that attracts the angel’s attention and interest. For example:  “Innovative Can Opener Opens New Market.”  This headline is straight to the point.  The potential angel should know it’s a pitch for an investment. Avoid the word “invention” or “inventor” in the headline. Angels are skeptical about us.

We need to tell the reader why the can opener is much better than what is currently on the market. “High-leverage handle requires only one-fourth the effort-an important benefit to challenged users.” We explain why senior citizens who struggle with conventional openers love the new design and how arthritic hands and weak wrists are able to easily open cans. Then we add additional benefits, such as, “Stainless steel; won’t ever rust or corrode.”

Following the list of benefits should be a few testimonials to show that people who have tested your prototype – or product, if you’re already in production – verify that it’s as good as you say it is. We then share statistics regarding how many potential users exist.

Assuming you’ve convinced the angel that you have a worthwhile new product, explain where you are in development and what you are missing, but don’t discuss money at this point. For example, “Utility patent is applied for, prototype is perfected and a pilot run has been produced.  Samples have been tested with outstanding results.  Sell-sheets have gone out to 35 catalogs, 23 of which have sent us their questionnaires, and asked for cost information.  All we need are stamping dies and one plastic injection mold to begin full-scale production and sales.”

If you are operating from your garage, admit it.  Angels tend to be practical and impressed with a disciplined budget. As an angel friend of mine once said, “If I see a potted tree in the lobby, I walk away.”

Finally, invite the angel to contact you so that you can meet and discuss possibilities for investing. The purpose of your executive summary is to stimulate interest – to entice the reader to ask for more – not to present all possible information. Tell the rest of the story either in a personal meeting or offer a more complete write-up. In either case, you now must state how much money you need and for what.  If you meet in person, it’s best to speak from a memorized script.  Think of every conceivable question the angel may ask, and have a written and rehearsed answer ready.

Your executive summary should follow the below outline:

  • Headline. Six to ten words preferred. Use words such as “new” and “innovative.” These get attention and arouse interest.
  • State the major benefit, if not already stated in your headline.
  • State secondary benefits.
  • Offer user testimonials. Use real names and e-mail addresses.
  • Give the statistics regarding potential users. But don’t predict how many you’ll sell. This is always suspect.
  • Explain the state of your venture. (Patent applied for; prototype made; catalog responses, etc.) And tell your needs, but don’t mention how much money you’re seeking. Keep that for further discussion.
  • Ask for a face-to-face meeting.

Thousands of angels are listed on the Internet. Finding the right one is like playing the green numbers on the roulette wheel. Persist and eventually you’ll find an angel whose mother is a little old lady with arthritic hands.

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