6 keys to earning a business angel’s trust, Financing

A third of start-ups do not reach the 5-year limit “, notes Tanguy de la Fouchardière, business angel and president of France Angels, the federation of networks of French private investors with 4,500 members. In 2016, it invested 40 million euros in 350 companies for a total financing amount of more than 120 million euros thanks to the leverage effect from other investors. “The competition between the projects submitted to us is fierce. But quantity does not necessarily equate to quality. † Of the 10,000 files it receives each year, in finance 3 to 5%† How to stand out, seduce and convince business angels † Follow the advice of Tanguy de la Fouchardière.

#1: Knowing how to surround yourself

I’ve never seen a big company with just one person. We preference for projects with multiple contractors† Even a light team, with two employees, is better than a single person. The team is often what is most lacking. The founder cannot carry everything alone and will be all the more creative if he confronts his ideas with someone else.

The start-up must be structured and evolve in an entrepreneurial way with a solid and competent team, attached to the capital of the company, consisting of a manager, a manager and a business developer. Another necessity: the complementarity of career paths and skills to ensure that the project is well maintained and cover the risks.

#2: Validate the feasibility of the concept

You must have validated the proof of concept. † What you offer should be innovative, or at least distinctive, based on recurring business and not on temporary speculation† The goal is to create long-term value. » Even if your turnover is low, you should be able to demonstrate the success of objectives through your first results: pilot projects, positive feedback from the market, distribution agreements, beta version of a website, community of followers…

Another important point, market identification† Make sure it exists, even if it’s still confidential. † The aim of the game is to activate it. If you think you’re the first, it means it doesn’t exist!

#3: Make a solid business plan

An idea alone is not worth much. It is the implementation and execution that counts. † An objective business plan is the most important persuasive tool of the dialogue. Based on the next two years, it should detail month by month what internal resources have been deployed to satisfy the customer » and the forecasts of the evolution in terms of growth and profitability. In other words, how the company will generate revenue, at what cost, and how the business model will evolve. † Behind the Excel table you should: see the reality and break down the business plan For example, I hire a salesperson on such a date, the first signatures come in a few months later, I get paid even later, and so on. Based on development assumptions, the business plan rarely goes as planned. It is your turn show your adaptability† † The business angel is taking a risk and needs to be confident that the team knows how to manage it and will lead a change of strategy if necessary.

“Even if you get a first refusal, don’t hesitate to come back once your project is more mature and advanced. Be combative, for we feed on failures. Tanguy de la Fouchardière, business angel and president of France Angels.
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#4: Explain the use of invested funds

In the pitch you have to talk about the offer, distinctive character, skills, market, competition, environment, proof of concept and… financing needs. It is up to the entrepreneur to prove his managerial side and to give details” the use that will be made of the money provided by the business angel. The latter must be reflected in the business plan.

#5: Communicate your need for support

No fireworks. The aim of the game is not only to seduce or sell you, but to make youstart a long relationship, an average of five years, which should be as authentic as possible. In terms of transparency, the entrepreneur must accept his mistakes and difficulties and recognize where he needs help.A business angel is not only there to bring money, but also to provide guidance. Listen to them and accept to answer the questions that bother you and to question yourself. Mainly because their approach is benevolent

#6: show perseverance

“Even if you get a first refusal, don’t hesitate to come back once your project is more mature and advanced. Be combative, for we feed on failures. †

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