Thursday, February 4, 2010

CFO Services – What Angels Need To See

If you are an Entrepreneur and you want to be prepared for an Angel or an Angel group you are best served to have the following ready:

• An Executive Summary – no more than 3 or 4 pages.
• Pitch Deck – 10 to 20 page power point presentation.
• Be prepared for a lot of questions
• 6 to 12 character references – after all they are investing in you!
• Names of customers or potential customers.
• Financial Model and Business Forecasting Tool
• Where is the money going to be spent?
• What are the real economic levers in the business?
• How does it look like over the next 4 quarters
• What hypotheses are you trying to test.

The Interim CFO or Part Time CFO can help you with the final 5 points.

Angels want to know if you financially thought through the project you are proposing. You need a financial model that addresses all of the contingencies and possible what if scenarios. You need a financial model that shows the angels you know how much cash you need and when you will need it. You need a financial model that shows the angels that you are on top of:

• Headcount and employee plan
• Purchase and/or production plan
• The costs related to your marketing and advertising plan
• Where their investment is being spent
• The metrics that will measure the businesses performance

Angels know that every business/investment opportunity they look at is going to have a set of hypotheses that the entrepreneur is going to present as there are no certainties. Each hypothesis needs to be carefully thought out and presented. The Angel needs to know what hypothesis or solution to a problem you are trying to test. What are the economic levers that are dictating that your solution to the problem is the answer and what economic levers are going to drive your solution to the market.

Speaking of angel investors there is a solid list of them on the following website Angel Capital Association