Angel Investors. Done or Dead.
Most of the dozens of startup people I have dealt with don’t understand how to get investment from angels. StartUps seeking investment are afraid that actually asking for a check will abort the very thing they’re about to request - angel investment . The fear becomes convoluted logic -
- “if I ask then I’ll be perceived negatively”
- “which will disrupt the likelihood of getting the very thing I’m about to request”
- “ergo - I will not ask”
So in a perfect inexperienced catch-22, startUps wait for the potential angel investor to offer to write a check and invest. Now unless you’ve invented sliced bread no one is just hopping up from the desk grabbing the checkbook and writing you a $25k check. So this approach is indeed a loser and a stalemate. You’re waiting for a positive reaction that results in an investment and your angel is identical to someone leaving a movie - satisfied or not - but done.
So how do you get the startUp investment without disrupting the likelihood? Well, you’ve got to change your frame of reference. You’re looking at the problem inverse to the way it really works. Look at it backwards from an assumed NEGATIVE conclusion - you never get that angel investor to write a check. THAT IS NOW FACT retrospectively. Therefore anything you did during your pursuit of investment, staying morally, ethically, and socially within bounds would not have produced the negative outcome. IN FACT reviewed in this simple way EVERYTHING YOU DIDN’T DO is what caused the negative result to occur.
HEY KEEP READING!
So if that’s the case the critical path items to getting any investment, whether from venture capitalists or angel investors, has GOT TO INCLUDE ASKING FOR THE MONEY. NOW! And any investor actually prepared to write a a check can’t be embarrassed or put off by actually being asked. REPEATEDLY. In fact an excellent test of a real startUp investor is ASKING FOR THE MONEY!
I founded three startUps, two with investors. The first startUp I bootstrapped with a partner and sold to ADP who later sold and it was again sold in 2003. The second co-founded with the same partner (acquired by) ate up $15M of investment, most of it from a famous technology billionaire. My third startUp I started alone and was funded in excess of $40M from big time venture capitalists.
YOU’RE ALMOST DONE!
In both investor backed companies Angels provided $1-$2M of investment. Although they were some $100k and even larger investors most were $25-$50k sized. So that’s 30-40 angels raised from per company! And if even 1/2 of the angels I met invested (which is crazy) that’s at least (35 Angels/50% close) * 2 companies = 140 ANGELS! I’ve pitched.I learned early on - they were real distinctions between serious investors and Newbies! And I learned early on - if angels were going to invest than any normal amount of cajoling - direct or indirect - would not sway their belief that they would make money by investing. In other words if they wanted to invest - asking them to or pushing for them to act soon or in a larger amount never derailed the successful outcome.
So - at the end of the day after you’ve done all that’s necessary to get the check - you either get the check or have a dead angel.
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Comments
Comment from vigdor
Time: April 15, 2008, 2:20 pm
Afternoon Cortez.
Assume you’ve got some money. If someone walked up to you and said “I want to start a record company” what would you say? Probably, you’d wanna know why give him some dough instead of just keeping it. Maybe you’d want to know what makes his proposed label different. If he stammered about maybe you’d tell him to get lost. But if he had a good idea, then maybe you’d ask if he had any expertise, if he had any experience, if he knew anyone, if he had any partners. If those thoughts made some sense maybe then you’d ask how much he thought he could sell and how long it would take.
So - if you can answer a lot of the same questions you’d ask - then you’re ready to commit the idea to paper, add some research to it, like who sells what in your category, who buys what in your category and you’ve got the makings of something you can start to circulate.
check back if you like.
Comment from Kay
Time: April 18, 2008, 11:42 am
Why is it so hard to get someone or groups who believe that this earth needs programs that connect human and animals to help heal the soul and improve ones physical, mental, and emotional well being. I have a business plan that covers all the sectors of my company which include profit and the non-profit sectors that work well and support each sector. This involves purchasing 3 properties in Colorado and one in Virgina that would cover the mid atlantic and the Midwest in all the programs and services. I am willing to offer debit/equity in the business. Part of the business will include manufacturing a brand new innovated service/product that will take the equine industry by leaps and bounds. I have 30 plus years dealing, owning, training horses and being a consumer myself I know this would be the hit and the sales receipts will be in the millions by year 2 of hitting the market. the other sectors involve a dude ranch, hay production farm both turnkey and the other two would be for the rescue and therapeutic programs. However with this new innovated idea, I require a signed confidentuality agreement before I can share my documents. contact me at heaven_scent_horses@yahoo.com and/or double_shoe_farm@yahoo.com
Comment from Aamco Transmission of Kannapolis
Time: April 19, 2008, 11:28 am
Dear Angels, For twenty eight years (28) my partner has been working rebuilding transmissions in Virginia and Michigan and is considered an “expert rebuilder” in the field of transmissions. We became partners and owners, completed training at the Aamco Training Scool, incorporated, secured a location in North Carolina, exhausted our private funds in fees, lease & equipment . We have a business plan for submission, we are
willing to offer debit/equity in the business. My professional preparation and practical experience includes certifications and ownweship of businesses for 25 plus years. We are humblely asking for your investment of
$50K . This amount will enable us to start up and continue our operation.
Comment from Annette Vanderzon
Time: April 24, 2008, 10:06 am
Executive Summary available for extremely profitable industry in psychic websites, seeking to expand.
Comment from Carolyn
Time: April 24, 2008, 11:01 am
Inventors wanted, I am looking for an investors to help me open a retail women clothing shop, in a upscale area in Florida. Plus a great location.I have been in business for over 6 years. I do have the experience , I had owner two other shop in other locations of Florida.This is a great opportunity and I am will to pay a good % for the help to get back into business again. And back to work. I have the mfg. Company, all line up and I just need the $25,000. to $50,000. to get thing started.
Comment from Luis Franceschi III
Time: April 27, 2008, 5:48 pm
I have been looking into purchasing some tax deed homes. I have actually purchased the list that the clerk of the court has at a dollar a page. I went on line to the site provided and realized this is real. It has been mentioned beofre and I actually had a contracting business for low voltage wiring last year that I closed due to relocation. I want the capitol to start this up but I need to know who I have to talk to, if it’s possible, and when. If possible I would need no more than $50,000 to begin. Thank you, Luis.
Comment from Donald
Time: April 28, 2008, 3:23 am
Seeking contact information for Investor (s), and/or lender (s), needed to participate in funding moving developing 4 season family recreation resort, “currently seasonal operation,” to the next level 360/24/7. Secured, excellent opportunity, great location with multiple venue operations.
Comment from cortez anderson
Time: April 15, 2008, 12:49 pm
I want to find start up money for record label and i need a angel to help me. what is my next step