I invest through Sand Hill Angels. It is the best angel investment group in the world because:
We are one of the largest angel groups.
We do not charge startups to apply or pitch.
We pool members' capital into a single entity on a company's cap table.
We have full-time professional staff running operations.
We support portfolio companies through tough times.
We have good member diversity:
Industry and professional background
All around the US (no chapters)
Age, gender, ethnicity, and personal identity
If you are an accredited investor, and you like innovation, consider joining.
Who does not get funded?
These are some things that, if they are true of your company, might make it difficult (but not impossible) to get early stage funding from investors.
The company has just 1 founder who owns most of the company stock.
The company has founders or executives who are spouses, close relatives, or otherwise connected by family.
The company has multiple classes of shares or gives different terms to different investors.
The company is not organized as a C corporation. An LLC is not enough.
The company is not incorporated in a US state. It is okay to have headquarters and all employees in another country, but there needs to be a US parent corporation for tax purposes.
What should go in a pitch deck?
Investors will decide to pass or take a meeting based on what they see in your pitch deck. Make yours a good one. Graphics that illustrate information about your company can be helpful. Photos and clip art from the internet are not. The care and effort of a nice style speaks well. Proofread your text careful.
Most pitch decks include approximately 1 slide explaining each of the following topics and perhaps a few more, in roughly this order.
Your customer is the person or company who pays you money.
What disadvantage will your customers have if they don't buy your product?
If your product benefits the world, that's nice, but be clear about who your customer is.
Quantify the problem with numbers.
What are the key novel features of how your product works?
Don't just say what it does, say how it works in a new way that hasn't been done before.
Use 2 or 3 slides if needed.
The better you explain your invention, the more likely it is that investors will recognize the value.
What are several competitors or second-best alternatives, and what do you have that they don't?
Compare to what the customer truly considers to be the second best alternative. For example: If you sell electric motor bikes in a place with a lot of bicycles, do not compare electric motor bikes to bicycles. Your customers will be people who can afford a motor bike and will be comparing electric motor bikes to gasoline-powered motor bikes. Gasoline-powered motor bikes are the second-best alternative for your customers.
A grid with columns for competitors and rows for the attributes that are most important to customers is very helpful.
The 2-axis quadrant style chart with competitor logos conveys less useful information.
Barrier to competition
What will stop somebody from copying you?
Network effect? Patents? Strong partnerships? Celebrity endorsement? First mover advantage? Brand loyalty? Geographical advantage?
This is often shown as 3 overlaid circles for annual TAM, SAM, and SOM, progressively from larger to smaller. The numbers are never trustworthy, but it is important to have words that explain what the numbers represent. That helps the investors understand who you customers are.
The smallest number should be at least $100 million.
A price per unit? A recurring subscription fee? A royalty?
How will the customers who can realize the greatest value from your product find out that you exist?
Direct sales is common for high-priced B2B products. Social media ads is common for B2C products.
Traction and revenue projection
How many customers, unit sales, active users, and how much revenue do you have so far (if any)?
A chart showing numbers per year or per quarter since sales started is helpful.
Also show projected future revenue per year.
It can help investors if you name lead customers.
What steps will you need for regulatory approval? And, when will you complete them?
A timeline diagram might help.
Not every business needs this section.
Milestones and use of funds
What objectives will you accomplish to increase company value before future funding?
What departments or major purchases will you spend the newly raised capital on?
Who are the CEO, CTO/CSO, and 1 to 3 other key people that will make the company succeed? What about them gives them an advantage over the second best person in the world for their job?
It is common to also name some advisors with impressive credentials. Advisors are easy to find. They have very little skin in the game. Many investors care about your advisors. I don't. I'm betting on you.
How much money are you raising in the current round?
Do a calculation based on use of funds needed to achieve an objective to arrive at a single number, not a range.
Are you selling newly issued preferred stock with a specific price (a priced equity round) or are you selling convertible debt such as a SAFE note?
If stock, what is the company valuation? Be clear about whether the number is pre-money or post-money.
If debt, what is the valuation cap, and what discount rate, if any, are you offering?
Even if the pitch deck gets you a first meeting, an investment won't occur without due diligence. If you exaggerate your business opportunity to get a meeting, you are wasting everybody's time and hurting your credibility.