Angel Investor Group

I have helped a number of clients pursue and secure capital funding from private equity investors.  For all clients in this process I tell them to approach potential investors as they would potential customers.  Investors come in all types.  Learn as much as you can about the individual, angel investor group or private equity fund before presenting to them; then present to them the information that they want to hear (not falsely, but approach investors on their ground, not yours). 

A few weeks ago I saw a presentation by a couple of young entrepreneurs looking to secure additional capital for their company.  Their company developed a SaaS application that is used as a logistics tool within other businesses.  It is purely a plug in product for a business customer's cost center. 

I had never thought of this before, but for software licensing and SaaS model businesses it seems that there is a big difference, at least from potential investors’ perspectives, between B2B SaaS applications which are tailored for profit centers and those for cost centers.  Tools designed for profit centers are much easier to sell to investors.  You show that if a customer utilizes the tool, they can generate an ROI which will lead to a certain profit increase.  For cost center tools, about the best you can do is show that the tool generates so much operational efficiency that it ultimately frees up resources to generate more profit in other areas.  For obvious reasons I think this is a harder sell to investors who generally want to see direct ROI.

I will write more about this topic in the future as I work this concept.