How to Pitch an Angel’s Group

SF Angels Group founder Manny Fernandez knows what it’s like to be an entrepreneur. He’s been there. Because of this, he wants to give startup founders a leg up.

Entrepreneurs hungry for seed funding can submit their business plans to SF Angels’ online platform, Additionally, Fernandez is a frequent speaker and judge at meetups and events where there are pitch contests, so those attending can approach him with their ideas.

Formal pitches to SF Angels Group are done by invitation only, after the group has conducted a pre-screen. In some cases, entrepreneurs Fernandez meets at pitch events and meetups will be invited to a pre-screening session. Others will be culled from Dreamfunded.

Image: Wikimedia Commons

One of the best ways to get Fernandez to listen to a pitch is by providing growth metrics. “Nothing gets my attention more than sales or lots of users,” he says. In absence of those, he looks for capital efficiency and a willingness to raise less funding in order to prove out a business model.

As for approaching other angels, Fernandez advises entrepreneurs to take a cue from “WII-FM.” “Everyone’s favorite radio station is WII-FM (What is in for me),” he quips. “When you talk about how the startup will make money for the investor, it will be music to their ears. If a startup talks about anything else, it will sound like static. So, when you are presenting to an angel, talk in terms on how the angel will make money from their investment. That is want angels want to hear.”

In addition, learning how to be humble during a pitch can go a long way. Entrepreneurs who disregard advice during a pitch, or appear arrogant, may turn off that potential investor. Basically, Manners 101 can go a long way.

Becoming an Angel

A little over a decade ago, Fernandez was overseeing a real estate investment fund. Around 2005 and 2006, he decided it was time to get into something else.

After taking business classes at Stanford and launching a profitable online real estate broker referral firm in 2007, Fernandez became a serial entrepreneur, starting an online real estate brokerage and an online news distributor. One big lesson: Failure can be valuable. “I learned more from my setbacks than my successes,” Fernandez says. For example, “I learned that if you can’t scale your business and get it big, then you’re better off trying something else. I also learned that if you are trying to enter a market where there is already a huge market leader it, that is a difficult thing to do. You want to have a huge market and get into it early.”

Up to that point, Fernandez had invested in real estate and his own businesses, but never into someone else’s venture. After taking angel investing courses at Stanford – while also taking programming classes — that changed in 2010, when he met two students who were creating an online document storage business.

“I saw what they could do with the technology, but they had no business experience. I felt I could help take them to the next level and also provide the $25,000 they needed for their budget,” Fernandez recalls. “That’s when I learned how to coach entrepreneurs and move them forward.”

Subsequently, word spread and Fernandez was called on by other entrepreneurs. In 2012, he became a co-founder of the SF Angel Fund, a $10 million fund that focuses on seed and early stage consumer Internet and software startups. The fund doles out between about $25,000 to $250,000 per investment. Fernandez declines to discuss the number of companies the fund has invested in to date.

Last year, Fernandez learned that San Francisco had raised more VC funding than Silicon Valley. “That told me follow-on funding for seed funded San Francisco startups looked good,” he recalls. That’s what prompted him to form the SF Angels Group (which is different from the SF Angels Fund), to create a network of investors to generate deal flow, he says. Currently, the group has approximately two dozen members. To date, members have individually invested in five deals in either enterprise software startups or consumer online companies. Members range from experienced executives to past entrepreneurs to VCs.

Image: Wikimedia Commons