6 Keys to Gaining Confidence from a Business Angel, Financing

One third of start-ups do not pass the 5-year limit “, Notes Tanguy de la Fouchardière, business angel and president of France Angels, the 4,500-member network of French private investors. 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 caused by other investors. “The competition is fierce between the projects presented to us. But quantity does not necessarily equal quality. ». Of the 10,000 files it receives each year, it is 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 have never seen a large company with only one person. We prefers projects with multiple contractors. Even a light team with two employees is better than a single person. The team is often what is missing the most. The founder cannot carry everything on his own and will be so much the more creative if he confronts his ideas with someone else. »

The start-up must be structured and develop into an entrepreneurial form with one solid and competent team, associated with the company’s capital, 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 covers risks. »

# 2: Validates the feasibility of the concept

You must have validated “proof of concept”. ” What you offer must be innovative, or at least differentiating, based on recurring business and not temporary speculation. The goal is to create value in the long run. »Even if you still have a small turnover, you must be able to demonstrate the success of goals 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 is still confidential. ” The object of the game is to activate it. If you think you’re the first one, that means it does not exist! »

# 3: Build a solid business plan

An idea alone is not worth much. It is its implementation and execution that matters. ” An objective business plan is the most important dialogue tool to convince. Based on the next two years, it must detail month by month the internal resources mobilized to satisfy the customer ‘And the forecasts for development in terms of growth and profitability. In other words, how the company will achieve revenue, for what expenses behind, and how will develop its business model. ” Behind the Excel table you should see 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 demonstrate your adaptability. ” Business angel takes a risk and must be sure that the team will know how to manage it and lead a change of strategy if necessary. »

“Even if you get a first rejection, do not hesitate to return when your project is more mature and more advanced. Be combative because we live by failures. Tanguy de la Fouchardière, business angel and president of France Angels.
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# 4: Explain the use of invested funds

On the field, there must be talk about supply, character differentiation, competencies, market, competition, environment, proof of concept and … need for financing. It is up to the entrepreneur to prove his managerial side and to to provide details ” the use that will be made of the money provided of business angel. The latter must be seen in the business plan. »

# 5: Communicate your need for support

No fireworks. The goal of the game is not just to seduce or sell you, but tostart a long relationship, five years on average, which must be as authentic as possible. In terms of transparency, the entrepreneur must accept his mistakes and his difficulties and recognize where he needs help.A business angel is there not only to bring money but also to accompany. Listen to them and agree to answer the questions that bother you and to question yourself. Especially since their approach is benevolent “.

# 6: Show perseverance

“Even if you get a first rejection, do not hesitate to return when your project is more mature and more advanced. Be combative because we live by failures.”

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