On Tuesday, May 29, Malay Shah and Matt Bailey, directors of VentureSouth Piedmont, gave entrepreneurs the unique opportunity to get inside the heads of angel investors at one of the largest investment firms in the U.S. to learn exactly how to make an effective pitch.
The interactive presentation, “Venture Capital: What We Look for in Companies,” was the latest installment in Winston Starts’ Inform speaker series, which brings different industry leaders to its downtown Winston-Salem office every Tuesday morning for talks that are open to the public. VentureSouth operates angel investment groups and funds that invest in high-growth potential companies in the Southeastern U.S. that are seeking capital to launch or scale market-ready products or services with demonstrated customer demand.
To see how VentureSouth selects those businesses, Shah and Bailey encouraged the audience of community and cohort members to work together to evaluate the 12-minute video pitch of startup company FarmShots and decide whether to invest using the very criteria the angel investment firm utilizes when screening company presentations: Concept/Vision, Management, Market, Competition, Technology and IP, Progress to Date, Business Path Forward, Cash Flow, Exit Strategy and Deal Terms. Considering these components allows investors to appraise both the viability of the businesses and the potential of the entrepreneurs or management teams behind them, selecting all-in leaders who are talented, trustworthy, determined and resourceful.
In 2016 alone, angels across the U.S. invested $21.3 billion in startup companies, but that doesn’t mean that angel funding is easy to secure. In fact, VentureSouth only invests in 3% of the 20-30 companies it begins to review each month; however, at the conclusion of the activity, attendees learned that FarmShots was one of those select few that made the cut to become a portfolio company of VentureSouth and the Piedmont Angel Network, so its pitch serves as a valuable case study for entrepreneurs on how to appeal to investors.
Shah and Bailey also encouraged entrepreneurs to know how to condense their pitch into 90 seconds for easy word-of-mouth marketing. In screening interviews, Bailey said that he asks entrepreneurs, “in two sentences, describe to me what your business is and why I should invest in it.” The directors said that many startups are surprisingly unprepared to answer this question without lengthy business plans or rambling stories.
The next Inform speaker will be Maureen O’Connor, a retired executive of Blue Cross Blue Shield of North Carolina who was named as one of 12 “People to Watch” in 2014 by Triangle Business Journal, one of the nation’s “100 Women to Watch” in 2009 by Diversity Journal and one of 10 “Women Extraordinaire” in the Triangle by Business Leader Media. Her presentation, “Healthcare is Complicated – Opportunities and Challenges for Entrepreneurs” will be held at Winston Starts on Tuesday, June 5, from 12-1 p.m.