Pitched to an Angel Investor, got rejected, his reason?

[bkkuberdude]

Greetings everyone,

I Just pitched to an angel investor from Dubai and got rejected. The ROI was 35% on $350000.

His reason for rejection? He can make higher ROIs a year than that. lol

I mean, how much ROIs do they expect?

Do you think a 35% ROI justifies an investment of $350k?

I would like your thoughts and insights on this? What has your experience with angel investors been?

Thank you

My humblest regards.

[cloudhopper]

Before you go - is that 35% return ON or OF investment?

[Seligne2]

35% ROI is BS. I don't blame him for giving you the cold shoulder.

[ExpatJ]

He may have thought you were a conman by offering so high a return so he just gave you a flippant response.

Do you have a detailed business plan and background/police check of your own history from your own country that you can share for example?

[Briggsy]

I just pitched to my mug of tea. Guaranteed rate of return on 1 million US$ is 40% p.a. for the next 20 years. The mug of tea rejected me. What a dumbass mug of tea. It certainly missed an opportunity there.

Comments?

[saakura]

He is just pitching here in the hope that some readers might send him a pm asking for more details.

[Anthony5]

Seen his other thread?

2 + 2 = 5

[SheungWan]

Devils Den wouldn't buy in purely on a 35% pitch return.

[puukao]

People want to borrow money all the time, and will likely not pay, claim bankruptcy, and hope they don't get arrested for being fraudulent. probably won't...so they get free money to play with.

if you can get 35% then why not start small with bank loan.....and soon you can scale up. get friends and family money, have them leverage their houses, bank accounts, etc...... Why? because there is risk and you want a stranger to take the risk...that is why i won't loan money to people....

i love emailing and saying i need family collateral....they get mad. why? it's such a sure thing? i ask them what other businesses they made money at? zero...i ask for business plans? nothing...or they send crap......

so much easier to just find a company who needs seed capital but after beginning angel stage.......so much more legit.

Edited January 8, 2015 by puukao

[Changnoi2]

and for that reason..Im out!

[Gulfsailor]

Your ROI is if your business succeeds, which is not sure at all since at this point you only have an idea. An established business does not approach an Angel. A good angel investor is happy to pick a winner 2 times out of 10. The other 8 go bust and all this investment will be gone. Hence he is looking at an ROI of at least a 1000% over the course of up to two years. 350,000 $ is a very high amount for an Angel. Why do you need so much. Normally you ask enough to proof the concept and get a few first customers. When that proofs successful you ask for more to expand the idea and grow the product and business, at which point you are talking Seed A money which the original Angel could also take care of if he likes. Seed A amount is around 10 times the angel investment and expected ROI is 100% to 200% over the course of 2 years.

[garyk]

You would probably be able to make more money and with less risk. Reading tea leaves in Doi Mae Salong.

[Robert24]

35% RoI looks interesting but maybe it was your project he didn't buy into.

Can you shed some light how you wanted to achieve an RoI of 35%?

[IMA_FARANG]

If you had serious figures and a business plan to support that 35% ROI claim, you might at least have rated a look at that documentation.

But I'll bet you don't have that and can't provide it.

All you have is a pitch

A pitch without proof is just hot air.

A verbal promise isn't worth the paper it is not written on.

And a golden glittering verbal pitch isn't even worth a promise.

That's why real investors with money have money to invest.

Because they don't fall for golden glittering verbal pitches.

Note:

The 80 percent rule applies here.

The 80% rule basically says that 80% of everything you see, hear, or are told is actually "male cow dung".

Smart investors with real money to invest follow the 80% rule.

If the deal can't pass the 80% rule test, run away from putting money into it.

Edited January 9, 2015 by IMA_FARANG

[bkkuberdude]

Hey guys!

Thanks you for all the vibrant response! There are also some excellent suggestions.

To tell you the truth, we are doing a business that is generating around 20% - 25% net. Although we've had a pretty rocky start, its stabilizing now. The business should generate 30% - 40% when maximized.

The business I pitched about was strongly related to our running business but is not our running business per se. It just requires financial seed capital we cannot afford and generates a net of around 45% - 50%

Its just all a learning experience for us.

From my research venture capitalist do look for returns of at least 30% - 40% returns per year. I don't know how true this is.

Dubai is very cash rich and from my personal experience, most people that lives there at least expects 18% - 20% returns on their investments per year with a 30k$ - 60k$ investment, which is probably the route we will go this year for our own running business and not the business I pitched to the Angel Investor.

We will continue to build on our Foundations and make it solid and just grow from there, slowly. Trust and delivering results on the small level first is a very important factor.

I don't think its wise for me to reveal much about the nature of my business as I am quite certain it will receive some backlash at this stage.

We learnt alot from failing to pitch correctly. There were fundamental flaws and we've learnt from it. We just wanted to try anyways.

I just wanted your opinions on how can an investor expect anything above 35%-40% on their investments.

Thanks for the response though. I've gotten great insights!

My humblest regards

Edited January 9, 2015 by bkkuberdude

[Seligne2]

You got great insights here, on TV?

[wooloomooloo]

We learnt alot from failing to pitch correctly.

Your patter may fail to convince for some considerable time to come. You sound like an estate agent and that's not a good look.

Edited January 9, 2015 by wooloomooloo

[SheungWan]

Hey guys!

Thanks you for all the vibrant response! There are also some excellent suggestions.

To tell you the truth, we are doing a business that is generating around 20% - 25% net. Although we've had a pretty rocky start, its stabilizing now. The business should generate 30% - 40% when maximized.

The business I pitched about was strongly related to our running business but is not our running business per se. It just requires financial seed capital we cannot afford and generates a net of around 45% - 50%

Its just all a learning experience for us.

From my research venture capitalist do look for returns of at least 30% - 40% returns per year. I don't know how true this is.

Dubai is very cash rich and from my personal experience, most people that lives there at least expects 18% - 20% returns on their investments per year with a 30k$ - 60k$ investment, which is probably the route we will go this year for our own running business and not the business I pitched to the Angel Investor.

We will continue to build on our Foundations and make it solid and just grow from there, slowly. Trust and delivering results on the small level first is a very important factor.

I don't think its wise for me to reveal much about the nature of my business as I am quite certain it will receive some backlash at this stage.

We learnt alot from failing to pitch correctly. There were fundamental flaws and we've learnt from it. We just wanted to try anyways.

I just wanted your opinions on how can an investor expect anything above 35%-40% on their investments.

Thanks for the response though. I've gotten great insights!

My humblest regards

You need to understand the relationship between returns and risk. We do not need to know the nature of the business but we do need to know whether there are any assets backing requested monies. If a loan is all you want then you could borrow from a bank but any bank would want to know if there is an income stream history to support repayments and hard assets to assign to the bank in the event of a default. If it is not a loan but rather an investment you are looking for then an investor is going to want a slice of the existing business assigned to him/her plus priority of return on capital invested. Just dangling a percentage return as you continue to will not do the trick to attract a professional investor. Maybe what you are really looking for is someone less experienced to invest?

[wooloomooloo]

My friend is telling me to beware of wide boys targeting cash rich Emirati.

[manarak]

Angel investors don't want to give a loan but they want equity or convertible loan.

35% ROI is okayish for the company as a business plan figure, but what angels / VC want is to multiply their investment by about 5 or more by later selling the equity they acquired for next to nothing before.

There's nothing "angel" about those investors, who really loansharks in reverse. The motivation to use them is the same, i.e. need of a loan but not enough assets to secure one. While loan sharks will shaft the borrower if the latter doesn't succeed but will leave him alone once they got principal and interest back, the "angel's" reward will be a large chunk of the company.

350000 USD is also a sum that is suspiciously low for a farang start-up, where the entrepreneur is expected to have family, friends and a network able to fund a mere 350k...

OP might have more luck talking to Thai investors rather than Western or Middle Eastern money bags.