Raising funding? Consider this nine-point checklist from a local angel investor

When it comes to securing a round of funding from investors, startup founder and angel investor Dave Troy says a business plan isn’t necessarily the first thing investors want to see.
The cofounder of 410 Labs and the Baltimore Angels investment organization waded into a conversation on the Baltimore Tech Facebook group about whether investors want to see a finished business plan from a startup right away. As Troy explained, most investors will have rejected a startup on the basis of nine questions, and therefore “will never read” a startup’s business plan.
According to Troy, here are the nine questions an investor will ask before signing off on a deal, reprinted with permission:

1. Do I know the entrepreneur? If so, how?
2. Is the entrepreneur delusional, or based in reality?
3. Does the team have relevant experience? Can they execute?
4. Is this a space that my friends are in? Will I have company? Or would I be out on a limb with this deal?
5. Do the proposed business models fit the pattern of what I have seen before?
6. Is this a product or service I could see myself, or others, using?
7. Is my investment, at the level I want to invest, materially helpful?
8. Is the entrepreneur pursuing a big, important idea? Or an incremental solution to a trivial problem?
9. Do I think I will make a 10x return? Or at least a 3-5x return?

“In the end, a lot of this boils down to who you know, fashion, herd mentality, and the personal biases of investors — which are arcane and may center around all sorts of things,” he said in the Facebook conversation. “About 5 to 10 percent of which is a written business plan — which most investors will never read, because they will have rejected you on one of the questions above first.”
From Troy’s list, what stands out?
For starters, Troy’s fourth point about whether a deal an investor is considering will involve his or her friends. Forget the Startup World Meritocracy Mantra: securing investment is as much about whom you know — and what people your acquaintances can introduce you to — as it is about having an idea that doesn’t “suck,” to quote Doug Humphrey, the founder of managed hosting company Digex who has his own rules on how startups should approach a funding round.
There’s also something to be said for not idolizing investors in the first place, as HBO’s new show “Silicon Valley” snarkily chastises startups for doing. As Troy notes, “narrative and characters trump numbers” for investors, generally speaking.
“I’d argue numbers alone are not sufficient to get an investor to invest, and that a good story is a necessary condition; and that occasionally, a very good story alone is a sufficient condition,” he wrote. “This is not because investors are rational or acting in their best interest or are thorough or smart: it’s because they are human and as susceptible to story as any other human.”