“There’s an investor out there that fits your idea,” says Tandem co-founder Ricky Knox when we ask him for his golden insight on the world of investment. “You just have to find them.”
“There's an investor out there that fits your idea. You just have to find them.”
It’s a sage piece of advice, almost proverbial. But then Knox, who set up his uber-successful challenger bank back in 2013, is most definitely a man to listen to. Just last year, after accruing years of high-profile investors, Tandem fully acquired Harrods Bank, securing both its future and Knox’s reputation as one of the best players and hardest hitters of modern finance.
So, for a man with investors from eBay founder Pierre Omidyar to House of Fraser owners Sanpower, we figured Knox would know a thing or two about the art of the pitch. So we asked him.
Professional investors have a clear ticklist
It depends on the format. Putting forward three clear messages is always important, and telling a story if you have time.
Professional investors have a clear ticklist: Market opportunity; Barriers to entry; Management skillset; Track record. Angel investors are more motivated by a clear story that they understand. Sometimes buzzwords don’t hurt, but don’t overdo it.
Structure your pitch in three acts
My view: Tell them what you are going to say, say it, then tell them what you said. Unless you are a master storyteller, getting them to understand the point is the hurdle many fall at.
Do your homework on the wider sector or industry
At the moment, anything that depends on EU exports or imports is a no-no. European expansion strategies also have risk. I still back fintech — but I would — and I think tech in the UK is looking stronger than ever.
There is an emerging ecosystem for UK tech businesses which is much stronger than it ever has been, with more venture capital investment than any other UK country, supportive tax legislation, great early stage support from incubators and much more. Now that banks and insurance companies are waking up to the threat, they are pumping money in too, to better understand the flow of ideas and businesses.
It’s not always going to be like Dragons’ Den
Dragons’ Den is not a typical pitch. The Dragons are much more engaged and experienced than a typical angel, and they are not as disciplined as Venture Capitalists.
Misconstruing the theatrical aspect as the main requirement could definitely damage your chances. Most professional investors are introverts and are turned off by an overly salesy pitch! Also people often don’t understand that there are very clear rails around the different categories of investor.
Having a background in finance might not be an advantage
I’d argue a city CV, while it teaches you the jargon, turns me off when I’m investing. I’d take an engineer or programmer over a banker any day. However, some marker of establishment, such as an MBA or a brand name on your CV is helpful. Being an outsider is tough.
But you should still know your numbers
Everything is a numbers game. It’s just probabilities. Everything is a matter of conversion rates. Sales, investment, anything!
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