BUSINESS ANGEL PARTNERSHIP:Impressing possible investors with your business ideas goes far beyond a 10-minute presentation.

Protracted negotiations rarely make for ideal reality TV - hence the focus on the bloodletting of the 10-minute presentation in the BBC's popular Dragon's Den programme.

But if you thought trying to impress a panel of investors with a business idea in the space of 10 minutes was exhausting, just wait until you get to the post-pitch and negotiation stage, if you even get that far.

"Simply generating an interest from investors is an achievement," explains Lar Burke, who heads up the Business Angel Partnership, which aims to provide a formal framework for the angel investing process in Ireland.

After the euphoria of getting through the pitch and winning interest from investors, this can very often be a perilous time for the company promoters.

Burke warns company promoters to keep their feet on the ground and maintain a sense of reality. "It is a dangerous time and what we tell them is that there is a hell of a long way to go before you convert that level of interest into money. They've got to understand the valuation they put on the business is not necessarily going to be accepted. Part of what we do is try to keep people realistic."

A number of stages are involved before a company promoter gets his or her hands on the investors' cash - post-pitch discussions, negotiations, commitment, shareholders' agreements and due diligence.

The post-pitch discussions are very much a get-to-know-you-better phase for potential investors who often require additional information such as a more detailed business plan and more detail on the financial projections.

"Out of that, we will talk to each of the individual investors to establish whether they still have an interest having looked at this additional detail. And we will then try to tease out the level of interest they might have and you can translate that into how many euro."

If there is still interest among investors, formal negotiations will start and much of this can centre on the valuation of the business. "Valuing a business is notoriously difficult. It is based on a set of assumptions. There are lots of theoretical ways to value a business, but the reality at the end of the day is that for these kinds of early stage or very small businesses, a lot of these technical valuation methods are theoretical," he says.

The initial valuation that the promoters put on their companies is, in the vast majority of cases, rejected by investors. It is often time for a reality check as business angels seek to protect any future investment.

"You will end up with an investor who will play hard ball, there is no question about that. You'll end up with companies who are naive and . . . see the potential of the business, but don't see the risk factors that the investor sees," saysBurke.

If agreement can be reached, the next stage is a firm commitment which usually takes the form of a term sheet.

"The term sheet will basically set out the terms and conditions of the agreement that has been reached," says Burke. "For instance, 'we will invest €300,000 for a 15 per cent stake in the business, subject to be being satisfied with the following', and it will make provisions for things like a seat on the board, for vetoes that the investors might want and, depending on the detail it goes into, it will make provisions for the maximum capital spend the company might enter into."

The term sheet will form the basis of the shareholders' agreement that will precede any investment. But before the agreement comes due diligence - both financial and legal - which could be forensic in its level of detail.

"Investors are going to look at the published accounts for the business. They will want to get hold of the management accounts. They are quite likely to send in an accountant depending on the size of the deal to look at the internal systems within the business itself," says Burke.

Investors are also going to substantiate the projections and, as part of that, will possibly make contact with the company's customers and potential clients.

"There will be a need to bring in professional advisors on legal side," explains Burke. "Part of what they will do is help translate the term sheet into a shareholders' agreement, but they also look at things like any intellectual property the company says it has. What is really going on here is they're testing all the claims the promoters have made."

It all makes a 10-minute presentation look easy.