How to Pitch Angel Investors Your Client Acquisition Cost without Developing a Product

How to Pitch Angel Investors Your Client Acquisition Cost without Developing a Product

You have a great idea for a site or an app, but you don’t want to spend potentially hundreds of thousands of dollars developing it. Instead, you want angel investors to step in and help reduce your risk. Good news, you don’t even need a product to get angel investors interested in potentially investing in your idea, but you will definitely need data. For example, you will absolutely need your client acquisition cost.

Now, angel investors can look at upwards of a 100 pitches per month. The common misconception is that you either need to have contacts or have vast technical experience for investors to get interested. Not true! Angel investors will be all ears if you present them with low client acquisition costs, high profit margins, and a scalable business model, even if you’re not a technical founder, and even if you have zero experience in the field. They are investors, they are simply looking for ways to make their money grow; everything else is noise.

The most important factor at the early stage of the investment cycle is the client acquisition cost.  Some are under the impression that if they present their MVP (minimal viable product) to the investor, it’s going to wow them; it isn’t. Experienced angel investors have looked at thousands of MVPs that they’ve passed on.

Here’s how to get to your client acquisition cost, and from there extrapolate all sorts of numbers, and make respectable projections for your angel investors.

  • Build a simple website that highlights every bell and whistle that you think your product is going to need to get happy clients, and ultimately, funding from investors.
  • Besides the typical pages that a site needs, have a two-step sign up form on your site. Step one is where you collect the client’s information, step 2 would be the payment details page, but this page is simply going to thank the potential client, and tell them they will be notified when the product is launched.
  • Advertise landing pages (always have A/B and multivariate tests running on these pages) on various platforms including Facebook/IG, and Google
  • Track every page to ensure traffic and sign-ups are captured.
  • Have a lead capture and email system/funnel in place.
  • Monitor your traffic and landing page conversions for at least 30 days.
  • Identify your client acquisition cost.

Now you’re ready to make projections on various key metrics that angel investors will be looking for when reading your pitch deck.

Using this methodology may cost you $5K to $10K and that includes building the site, optimizing the landing pages with multivariate tracked testing, advertising expenses, pitch deck development, even video production. You can then reach out to angel investors and present them with a pitch deck that has the type of numbers that may impress them. Now, quite honestly you may find out that your business model didn’t garner the type of response you were hoping it would, but at least you would find that out for a fraction of the cost it would take you to outsource the development of an actual product. Moreover, some entrepreneurs have gone out to build their own team of developers only to find out the market isn’t interested in their product, and in such scenarios have unnecessarily burned millions of dollars.

Being an entrepreneur takes patience and careful management of capital expenditure. An entrepreneur may fail 10 times in a row, but if they have managed their capital expenditures correctly, and have not given up, one of these days, the big payday may hopefully find them!

If you need help with building, optimizing (A/B and multivariate testing landing pages), tracking analytics, and promoting your site to get it ready for an angel investor, get in touch with me here, so we can set-up a Zoom meeting, and discuss your goals.

 

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About Us

Since November of 1996 RegisterEverywhere.com has provided over 17,500 clients organic Internet marketing, strategic website re-design, segmented/targeted email marketing, and search engine optimization services they need to get relevant traffic to a website that converts! RegisterEverywhere.com stands behind each and every customer, every step of the way! We want you to continue to do business with our firm, and we want our work to exceed your expectations so that we can earn referrals from you. If you succeed, we succeed!

Register Everywhere, Inc was founded by Raffi Sosikian in 2003. Raffi is a highly proficient web and software developer. He calls himself a techprenuer having established various online businesses, including a search engine that he developed for which he was granted a patent by the USPTO. Raffi isn’t your typical coder. He says no techpreneur can survive unless they think like a markerter. Raffi has an MBA, holds a Series 3 license (he’s also a registered Commodity Trading Advisor and has developed several automated trading algorithms for the NinjaTrader platform), and has a passion for gardening.

Raffi and his wife Betty have two children, and they live in Los Angeles (Sherwood Forest), CA.

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