Angels in the Architecture

It's been busy over the past few weeks. Specifically I seem to have been spending a lot of time in the company of Angel Investment folk. Makes them sound a little like pixies.. Anyway, there are worse people to spend time with. I haven't yet met an uninteresting person in that particular field. I guess it's because they have to deal well in two directions, both those with the cash, and those with the ideas.

I thought it's worth passing on a few gems I heard over that time, properly credited of course.

Firstly, from Pat Geraghty, partner at Central England Business Angels, a few words of advice on what not to say if you're hoping for Angel funding:

• It's such a good idea I don't need a business plan
• It's such a complex idea a need a 200 page business plan
• I deserve a £70K/pa salary as CEO
• So do my mum (company secretary), dad (CTO) and sister (I give up - director perhaps?)
• The first year our turnover will be £30K, rising to £4M in the second year
• We're British, so we don't actually do "sales." (Pat is not from 'round here' of course.)
• However, our product is self evidently fantastic, and will immediately get 50% of the market
• Because there is no competition
• I have all the business skills needed to run the company

Looking around there was a mixture of laughter and sheepish looks as she ran down the list. Some from the same people.

A few days later and Stephen McEwen from Beer and Partners was able to give the flip side of the coin. What three things must be centre stage in your (commendably brief) business plan?

I was pleased to get my guess right in his entertaining interactive presentation.

• How much money is needed?
• What exactly is it for?
• When and how do I get it back?

Interestingly I discovered that one key difference between VCs and Angels might be in the length of business plan required. Pat was adamant; 10 pages maximum. The consensus from VCs was that up to 30 was acceptable. Perhaps it's a concentration span issue? Luckily Beer and Partners do a very good guide on how to do a tailored business plan for submission to Angels, which I thoroughly recommend. (I notice they also mention 30 pages, but I would recommend less than that, personally.)

Good luck!