Your 30-Page Pitch Deck Is Getting Deleted Immediately

Sean Weisbrot: Almaz Edilbaev is the co-founder of Change Angels, a Chicago based angel syndicate, and they focus on investing in underrepresented founders in the US and in the former Soviet Union block of countries. And in this interview we talked about the things that he sees founders do that cause them to fail. Things that that they do that cause them to succeed. The differences between VC and angel, the benefits of working with an angel syndicate and so much more. So I hope you enjoyed this episode. Let's get to it. What made you wanna become an investor?

Almaz Edilbaev: I landed an internship with the, uh, prominent, uh, venture capital firm at that time. So it was based in, uh, Moscow, and we invested in, uh, the Russian, uh, copycats of the, the successful business models of America setups. So basically we invested in the Russian version of Netflix, the Russian version of, uh, booking, uh, Airbnb, something actually. We're super successful, but some of them were not. But yeah, the, that experience was really like, mind changing. And after that, I just got in love with investment with venture investments because before that, uh, while, uh, studying, like doing my undergrad, so I did my undergrad in business administration, economics and mathematics. So it's pretty much, uh, knowledgeable about investments and loved it so much. That's why I chose this path. But yeah, my first internship was really like the critical, the foundation of the whole, my career after that.

Sean Weisbrot: What did you learn that startup founders would be able to value this information?

Almaz Edilbaev: The first lesson learned would be that look, look at the trends and follow the trends. Uh, the second thing is I think that sometimes, uh, shuts failed because of the, uh. Really, uh, bad, uh, team dynamics within, uh, with, uh, startup founders. And sometimes, uh, I think that at that time, like every, everything was on the raise and the market, uh, like was very hot. Uh, so that's why startups attracted, uh, raised a lot of funding. I think the same happens, uh, in the US like five years ago. And instead of founders like. Uh, assign them like very high salary, like just would imagine like very big amounts just compared to the finding the rest and just yeah, that's spend this money and, uh, uh, and feels like they all, like most of them lost motivation and yeah, I know that one, the setups failed, uh, because of this, uh, they, they couldn't, uh, motivate, uh, themselves enough. Uh. To, uh, compete with the top companies, for example, like Russian, I mean the booking or Airbnb. So it was one of these companies that failed. And the last lesson I would say was, uh, yeah, I mean the founders, uh, thought, I mean, this situation would last forever. So just, yeah, there was thinking, as I said, the market was really hot. There was very few startups. Yeah, I would say like tens of really is, uh. High quality companies and a lot of, uh, venture money is just, uh, chasing all these hot startups and very big, uh, uh, big rounds. Uh, a lot of burn and, uh, unnecessary like, uh, big headcounts, all this lead, uh, to the situation when, uh, most of the startups failed and actually closed. But, uh, some of them that, uh, did this really well and. Were, uh, pretty effective. They just withstand this, all these situations and, uh, became very successful because, uh, as you may know that after that in 2014, all this crisis began, all these crisis situations in the Russian economy, all this, uh, tough, uh, like political situation and, uh, yeah, and only like the strongest companies could survive.

Sean Weisbrot: What do you see as the biggest difference from VC and Angel? Investing.

Almaz Edilbaev: Yeah, I would say the difference is pretty big. Uh, but there are a lot of similarities. For example, when you work in vc, so you actually, yeah, you have a team. You have a team of analysts and associates doing all this analysis, due diligence and so on, so forth. So they're doing like, uh, driving pretty deep, trying to understand the industry, uh, the companies, uh, competitors and. Trying to identify the best company and to invest, put all the, all the money into this company. So while an angel syndicate or an angel, so you don't have all these resources, so you have pretty, uh, uh, restricted, limited source of, uh, capital that you should put all into all these companies at the same time, you're pretty much limited in your resources. It's usually one to one person or maybe two persons, business syndicators founders and maybe one analyst, analyst doing some analysis and helping all this, uh, with due diligence and admin stuff. But, uh, in terms of the, uh, uh, so this is, uh, sort of, uh, cons for angels, but as for the pro and, uh, advantages. So angels are pretty much, uh, uh, very quick in decision making. So they can do decision just in one day. Uh, wire the money and just, yeah, just be very quick and help the setup, actually raise it pretty fast. For example, as a VC investor, you usually go through multiple steps. So like the initial analysis, initial investment committee, like deep dive, uh, during some due diligence, and then second investment committee negotiations, term sheets or whatever, and then actually transfer this money. It could take. Like a couple of month or maybe six month. So anyways, you cannot do it like pretty fast. 'cause investment companies sometimes just, yeah, they just gather like every, every month and discuss all the companies. Uh, but as an angel syndicate, it's, as far as, you know, they usually gather every, uh, every, every other week and just yeah, discuss all the companies, make quick decisions. Then work, uh, with the angels, and then yeah, just, uh, trust with the money. It's, yeah, it's really pretty fast, I would say. But the, uh, in terms of the quality of the analysis, yeah, angels for sure. They rely on, uh, VCs or other investors a lot.

Sean Weisbrot: You mentioned a few reasons why startups that you were involved with, uh, from the investment side, failed. Can you name some things that you saw startups do that caused them to be successful?

Almaz Edilbaev: I would start with the industry, industry expertise, because especially now, access technology is, is pretty low. So, and everybody is sort of like on the same, on the same ground. So industry expertise is what make a difference, so, so usually we look at people who spend. Yes. Or even tens of Yes. Uh, like in the specific industry. For example, in healthcare, in logistics or financial services, it means that, you know this industry inside out. So they made connections. Uh, they may know their potential clients, uh, potential investors, uh, other people doing similar businesses, so they, they can look for synergies. So this is, uh, very important for us. The second thing, um. Yeah, I would say it's an entrepreneurial or a founding experience. Uh, that's also very important because you, when you just left your corporate, uh, uh, yeah, and we know that all founders are very smart people, very energetic, and uh, they usually like get things done, but yet usually takes some time to figure out how to do, how to run a startup. It's different from your corporate life. For example, before you work at, uh, some food and beverage company, and now you're running some startup in this industry as well. But yeah, that's completely different. So you had pretty big budgets before, right? Now you have pretty limited resources. Uh, you need to attract really, uh, high quality talent at the same time. Do sales, do fundraising and just yeah, get things done and yeah, it's really tough. Uh, I think that very few people really understand. Attended just before studying that. Yeah. They were assuming, okay, if they were pretty successful in the corporate life, they would be successful in the entrepreneurial life. It usually happens, but in our experience, so when you're doing your third business or fourth business, yeah. I think that, uh, studying from this numbers you're doing pretty much, uh, like understanding of like how to run a successful startup because Yeah, that's a completely different story. The last thing I would say is, um, yeah, in terms of the, uh, team and, uh, founders and their experiences, uh, experience in, uh, fundraising and experience in, uh, managing team, uh, experience in raising team, I think it's also very important because yeah, managing team of, uh, five or 10 people is completely different of from managing 50, a hundred, 200 people. That's completely different. Yeah. Sometimes founders, uh, do not really understand, uh, yeah, do, do not have really expertise or, uh, yet, uh, to do this. And so that's why should just maybe step, just, uh, step back and see, like if you can bring like more experienced people, more experienced hires, like some managers, uh, with uh, like this kind of experience before. Just, I don't know, learn it, uh, from scratch. I think that, yeah, you still learn it, how to run a setup. Yeah. They would learn it, uh, this too. But yeah, they should acknowledge this, uh, this problem and this problem exists and just like, yeah. Uh, be proactive in solving this.

Sean Weisbrot: When someone sends you a deck, how long do you look at that deck before you decide if you wanna show it to anybody else? Because I've seen things like VCs will look at a deck in about three minutes and 25 seconds. So do you, do you have an idea of how long you take to actually go through the deck before you decide what to do?

Almaz Edilbaev: I think sometimes VCs usually like take you in list time to look at the pitch deck because, yeah, I think so. If you can look at 30 seconds, you can really understand what's in. So if you wanna like go and spend more time or not.

Sean Weisbrot: If you're only giving them 30 seconds, what do they need to do for you to be willing to go to the next slide? And the next slide? And the next slide. How do you, how do they keep your attention for longer than 30 seconds?

Almaz Edilbaev: Sometimes like when you look at the deck, it's not really clear from the first two slides. So like, what will be in the speech? Uh, what, what is this speech? The pitch is about because yeah, when you look at the like, problem or solution, or, it is not really clear what this guys is solving, why this is a really big pain and, uh, why the market is big and why your, your, your team is unique to solving this problem. So it's not really clear. So yeah, I think that, uh, like every experienced, uh, VC or investor can really grasp it, like from. Two or three slides, just like skimming them through and just spinning maybe 10 seconds. So it's really, it should be really like catchy. So when you look at the headline on the top, and yeah, we are solving this because this, this is our solution. This is why we are unique.

Sean Weisbrot: Hey, just gimme 10 seconds of your time. I really appreciate you listening to the episode so far, and I hope you're loving it. And if you are, I would love to ask you to subscribe to the channel because what we do is a lot of work and every week we bring you a new guest and a new story, and what we do requires so much love so that we can bring you something amazing. And every week we're trying really hard to get better guests that have better stories and improve our ability to tell their stories. So your subscription lets the algorithm know that what we're doing is fantastic and no commitment. It's free to do. And if you don't like what we're doing later on, you can always unsubscribe. And either way, we would love a, like if you don't feel like subscribing at this time. Thank you very much and we'll take you back. Was there ever an uh, a founder. Who said something or did something, or their deck was a certain kind of a company that your instant reaction was, no, get away from me. Don't contact me again. They said something. They did something, and their business was just so awful. Or they were awful. Like, do you have a, a specific experience you can share?

Almaz Edilbaev: So sometimes people send like blurb, which is like one page long, or even two pages, so it's very long sentences. So yeah, I would say it's very, everything in a deck, they just put it like in a, some sentences. So nobody reads this, so just, uh, yeah, uh, don't do it. Second mistake in terms, in terms of the tag is you, they see the deck, which is 30 pages long and a lot of words, and nursery, I don't know, like pages with. Some market analysis and whatnot. So I think that it's, yeah, it's most likely nobody would just look at it because Yeah, it's, it's, it's too long. So VCs, uh, they have a lot of startups. They have a lot of, uh, inbounds coming in. So, and yeah, they just wanna spend time as like, much efficient as possible, and they wanna spend time on the, uh, startups that, uh, on our founders that. Did their analysis before they did their homework and they know what they're doing. But sometimes even emails are like, like pretty long, I don't know, like 500 words. Some essays like writing this and this. Like nobody's interested in reading, uh, like very long

Sean Weisbrot: messages. Do you open every single email or are you biased? And you go, oh, well that title, that subject title is interesting. I'm gonna click on that one. But then someone else's title is Hi. And you're like, ah, I'm not gonna open that one. 'cause I don't know what they're talking about. Right. So how do you look at that? Do you, do you bias yourself towards opening certain emails?

Almaz Edilbaev: If you look at the email, I think it's pretty much clear from what is inside. Like, is it a really good setup? Is it worth speaking or not? So what we, we usually do is like we look at the, uh, short description. So we look at the blurb. So blurb is really important, just highlighting why we should talk to you, why, uh, we should have a intro call. Then we look at the, uh, founders, usually CEOs, uh, LinkedIn, saying, okay, if it really fits, uh, do this guy have really this industry experience? What they said and is, is really like match between what you guys did before and what you are doing now. Uh, yeah, and, uh, yeah, that's it. Then I think everybody looks at, everybody likes like big names, like, uh, I don't know, Google or Meta or like some software engineers that like top AI startups or, uh, I dunno, some big schools or whatever. Yeah, everybody likes this. So this is, yeah, I would say the good first ticket to the first call. Yeah. But then after that it's all about, uh, what you actually do, what's your setup about? Do you have any real good traction?

Sean Weisbrot: What's the value of going with a syndicate over individual angels?

Almaz Edilbaev: So when you work with Angel Syndicate, I think that, uh, yeah, you have a lot of resources. It's, it is other angels who also work along with you. So, and uh, it is. Lead angels. So for example, we act like, uh, lead angels. So we do, we find all these setups, we do analysis, we do all this negotiation on behind and uh, yeah, and you can decrease. You can actually decrease your check. So, for example, just being an as in, uh, just angel investor. So, uh, for example, in a pre-seed round, sometimes, uh, yeah, I mean, some really great reserves may not, like, might, might not take your check 'cause it's too, it might be too small for them. But if you like, collect all this money as, and syndicate and put just in one bulk, I dunno, 20 5K or 50 K. So I think, yeah, it sounds pretty okay. Because I mean, you, you might have like, I don't know, a hundred k for example, for angel investment. So you can do, you can invest like in five startups, for example, 20 K per company as an angel, individual angel investor. But this is, anyways, it's pretty high risk 'cause it's just only five startups. But if you work with Angel indicates you can invest, for example, in 10 startups or 15 startups. 'cause you work along with other angels and you have greater pipeline. They may, they might have other, uh, resources, uh, so that they can pull, uh, the money, attract, uh, startups, uh, do some networking, uh, build connections. Yeah. Things that, it's, it's only advantages in my opinion.

Sean Weisbrot: Is there anything I haven't asked you that you feel is really valuable advice you can give to founders?

Almaz Edilbaev: In an angel syndicate is an investor, so you'll have a really access to a really great pipeline. So access to venture capital firm is like much, uh, it is like much higher because, uh, I mean, to be an LP in a venture capital firm, so you need to put at least a hundred KA hundred K investment. So to be part of the Angel syndicate. To be an LP investor in the venture capital firm. So you need a hundred K minimum, uh, but to be an investor with an angel syndicates, so you don't need to commit any money. So you can just invest on a, like, ad hoc basis or if you like some startup so you can invest and the, but the excess of the deal is pretty much the same. So I would say the, uh, quality of the analysis. The quality of the startups is pretty much the same. Maybe just to compare it to venture capital, top venture capital firms, it might be a hundred percent. And with venture firms, if you're an lp, but with Angel syndicates, it might be 90, 95%. But, uh, the, uh, excess is, yeah, access is pretty big. So you can just join and syndicate, look at the deals. And Coin West with the, uh, with the, uh, leading in with the lead angels, with the leading investors.