Ask any angel investor what we invest in and the honest answer is: problems. Not solutions, not founders, not markets, but problems. The solution matters, of course, and the founder matters enormously, but we get to both of those by way of the problem. A pitch that leads with the solution has the order wrong.

Right now, we are seeing a wave of startups solving AI-related problems:

• Bias in models
• Hallucination
• Copyright and training data provenance
• Deepfakes
• Data privacy
• Energy use
• Opaque decision-making
• Autonomous agents acting on behalf of humans without clear lines of accountability

Some of these are commercial problems, such as when a company needs a solution it can buy off the shelf. Some are society’s problems that will be solved by laws and regulations rather than by individual companies competing in a market. Both routes lead to startup opportunities, but they lead by very different paths, and a founder who confuses the two will pitch the wrong company to the wrong audience.

The distinction between a problem you can sell into and a problem society has to solve through regulation is one of the things a well-articulated problem statement makes clear. Which brings me to the point of this post.

Ten minutes, fifty people

At Brisbane Angels, founders get 10 minutes. That’s it. Ten minutes to walk into a room of 50 angels, deliver the pitch, and earn the right to a follow-up conversation. It is a very different exercise to a one-on-one with a VC, a family office, or a single angel. In a one-on-one you can read the room of one, double back, adjust on the fly. In a room of 50, you have to distil and simplify hard enough to carry most if not all of the room. If you lose people in the first few minutes, the room becomes unsettled. People start whispering, checking phones, trying to work out what’s going on. Once that happens, you don’t get them back.

I’ve watched hundreds of pitches and see this happen time and again. I’ve also seen that the slide that decides whether the room comes with you is the problem statement.

Why the problem statement is the whole game

A well-articulated problem statement sets up the whole pitch. If the problem lands, the audience extends credit on the solution. You’ve built something, fine, we trust you on the build. We can dig into the technology, the unit economics, and the team in due diligence. What we can’t reverse-engineer in 10 minutes is whether the problem you’re solving is a compelling problem worth solving.

If the problem is fuzzy, no amount of slick solution-pitching rescues it. We don’t usually spend much time worrying about the solution if the problem is well articulated. We assume you’ve built something that can solve it. The conversation moves on. But if the problem is fuzzy, every subsequent slide must work twice as hard, and the room is already drifting.

This is harder than it looks. I have spent years talking with some founders who still haven’t quite nailed their problem statement. They have a working product, paying customers, real revenue, and yet, when asked to describe the problem in one or two clean sentences, they fumble. The pitch reflects the fumble. Founders tend to spend their preparation time on the solution, the demo, the deck design, the financials. The problem statement is treated as a single slide to get through on the way to the good stuff.

It is the good stuff.

Finding the problem statement from first principles

When I work with a founder on their problem statement, I tend to come back to two questions. Both are first-principles questions. Both, in my experience, do most of the work.

The first is: why are you doing this?

The best answer is also the most common one. “I worked for a company, ran into this problem, looked around for a solution, couldn’t find one, asked my company if I could build it, they said no, so I left, built it, and now I’m selling it back to them.” That sentence contains the problem statement, the competitor analysis (they looked and couldn’t find one), and a first customer reference (their old employer). The founder has lived the problem. The pitch almost writes itself.

The second is: why is this customer buying it?

The founder’s framing of the problem is one input. The buyer’s framing is the one that matters. Ask enough actual customers why they bought, and the problem statement starts to write itself. You hear the same phrases repeated. You hear which features matter and which don’t. You hear what the buyer was doing before: the workaround, the spreadsheet, the manual process, the other vendor that didn’t quite work. That’s the problem statement in the buyer’s own words, which is the version the room wants to hear.

Broad versus niche

VCs often push founders toward broad problem statements. The broader the problem, the bigger the TAM, the better the fund maths. So the founder gets coached into framing the company around climate change, or gender inequality, or food waste, or the housing crisis, or mental health, or obesity, or the overuse of natural resources, or financial exclusion, or the productivity slowdown.

Each of these is a real problem. Each is also a terrible early-stage problem statement.

I prefer niche. A niche problem is tangible. It is solvable with the capital we’re providing. It has a narrower competitor set. A broad problem usually means competing with industry giants from day one. A niche problem also acts as a proxy for go-to-market strategy as the founder is telling you exactly where they’re going to land first, and that’s diagnostic. The discipline I look for is solving the first and best problem in the problem space.

The concept I like is the problem space. The problem space covers both the niche and the broad. The founder enters through the niche, solves the first and best problem in the space, and earns the right to expand. The deck should show this expansion path — niche entry, broader space later — rather than claiming the broader space from slide one. The expansion is part of the upside argument. But the entry must be tangible enough that the next dollar of capital does something specific.

The evangelist trap

Founders who pick a society’s problem often drift into evangelist mode. They want to change the world, and the pitch becomes a sermon. The slides talk about behaviour change, awareness, mindset shifts, ecosystem coordination. The financials are vague because the path to revenue runs through changing how the world thinks before it can run through customers.

Evangelists are expensive to fund. They spend a lot of money trying to change minds, behaviours, and policy, and the path to commercial traction is unclear. Angels are not the right audience for evangelism. We are trying to back a business.

There is a structural reason for this. Society’s problems usually have the government as the single buyer, and selling to government is really hard: long sales cycles, political risk, procurement rules, budget cycles, change of minister. Most society’s problems get solved by laws and regulations rather than by individual companies competing in a market. The government acts, and the rest of the economy adapts.

Which brings me to the corner of the broad-problem world where the economics work.

Regtech — the elegant exception

When society passes a law, every affected company has to comply. The government creates the demand. The private sector buys the solution. Regtech sells boring, annoying, mandatory things. Companies need to buy. Competition is often limited because the regulation is specific and the integration work is real. The tailwind is structural rather than fashion-driven.

Brisbane Angels has backed several regtech companies and the pattern is consistent across all of them.

Avarni sells audit-ready Australian Sustainability Reporting Standards (ASRS) compliance. The product was good before the regulation and it became necessary once the law landed. The regulatory hammer is what unlocked the buying decision.

Fly Freely sells compliance software for commercial drone operators. Drones are flying machines in shared airspace, the regulatory regime is dense and growing, and the operator needs to sit cleanly between their commercial activity and the regulator. Fly Freely sells that layer.

Wych sells infrastructure for Australia’s Consumer Data Right (CDR) and Open Banking regulations. The regulator mandated data portability; companies need infrastructure to comply with the regime and to use the data it makes available.

Propcode sells urban planning compliance. Planning rules vary by council, change constantly, and have to be navigated by anyone building anything. Enter an address and a project type and Propcode’s software does the research for you in seconds, faster than a human expert can.

The pattern in every case is the same. Government passes the law. Companies must comply. A software company sits in the middle selling the compliance.

Which loops back to AI

The AI problems I opened with are going to follow the same path. Some are commercial problems with commercial buyers. Companies will pay for hallucination detection, model evaluation, agent observability, AI-native cybersecurity, data lineage tools. Those startups have a normal pitch: here is the customer, here is the workaround they’re using today, here is what we sell them.

But the bigger AI problems — bias, deepfakes, privacy, accountability — are going to resolve into regulation. The EU has already moved and Australia, the US, and others will follow. Every regulated company, which is to say almost every company, will need to comply. A generation of regtech companies will be built to sell them that compliance, in the same way Avarni was built to sell ASRS compliance and Wych was built to sell CDR compliance.

This is one of the most interesting problem spaces to be watching right now. The pattern is the one Avarni rode with ASRS, but on a larger and faster timeline.

For a founder pitching in this space, the problem-statement discipline matters more than ever. There is a version of the pitch that goes: “AI is dangerous, society needs to respond, we are building tools for that response.” That is evangelism. There is another version: “When the AI Act comes into force in this jurisdiction in this year, every company over this size will need to demonstrate this specific control, and we are the software that lets them do it.” That is a business.

Founder-problem fit

There is one more test. Some people say early-stage investing is all about the founder. I agree. But what I really look for is founder-problem fit. Is this the right founder to solve this problem?

A doctor trying to find a cure for a disease their child has is extraordinarily motivated. That motivation translates into the resilience required to survive the seven-year grind to a real outcome. The founder who left their job because the problem wouldn’t let them go is more likely to keep going when the first big customer churns, or the round takes nine months instead of three, or the technical co-founder leaves, or the regulation gets pushed back two years.

Founder resilience can often be inferred from the problem itself. If the problem is one the founder couldn’t stop thinking about, a problem that found them, rather than one they went looking for, then the resilience is already baked in. If the problem is one a VC encouraged them to pick because the TAM looked better, it isn’t.

This closes the loop. A good problem statement isn’t just well-articulated, it is the right problem for this founder. The pitch lands when both are true. The room leans in not just because the problem is real, but because they can see the founder is the person to solve it.

Ten minutes is not a lot of time. But it is enough to communicate one well-defined problem, the founder’s connection to it, and the first sharp move into the problem space. Get those three things right and the rest of the deck is a formality. Get the problem wrong and the rest of the deck is irrelevant.

Problems, problems, problems. That really is what we invest in.

Richard Moore is co-founder of MooCoo Ventures, an angel syndicate that co-invests alongside Brisbane Angels, one of Australia’s most active angel groups. He has made over eighty personal angel investments since 2013.

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