Trying to get funding for your startup? Tons of quick tips in this presentation to help you out.

1. Getting Investment
From Angels
John Schmitt
5/18/11
john@gophoto.com
“Getting Investment from Angels”
5/18/11
john@gophoto.com

2. Searching for Funds: So Sexy!
Finding a Mate
Finding an Investor
Lead Generation:
Networking
Networking
Lead Qualification: First Date
First Pitch
Sales Process:
2nd-3rd dates
2nd-3rd round pitch
Reference Checks: Meet the family
Due Diligence
Closing:
95% of leads fail 95% of leads fail
Existential
Importance:
Genes propagate
or not
Business survives
or not
>1?
Usually just 1
>1 encouraged
“Getting Investment from Angels”
5/18/11
john@gophoto.com

3. Searching for Funds
●
●
●
●
●
As founders, this is often
the hardest thing you'll do.
Lack of experience raising funds
Tons of time spread over months
You don't see results until the end
You get rejected 95% of the time
● ...Even when you “win”
“Getting Investment from Angels”
5/18/11
john@gophoto.com

4. Start Early
Start before you need $
● 6-9 months before
● It takes time
● To find leads (fishing)
● To work on your pitch (bait)
● To reel them in (convert)
● For them to decide
● Your small startup team is likely FAST
● Moves at the speed of skype
● Don't expect investors to move nearly as fast
● Moves at the speed of banks
● Often, investors have incentives to (slightly) delay
●
“Getting Investment from Angels”
5/18/11
john@gophoto.com

5. The “funnel”
You get leads
– Your network
– Angel.co
– the “eHarmony” for startups
You do first rounds
You get to 2nd/3rd rounds
You get $
# of potential
investors
In each step, your goal:
… is to get to the next step
Don't over-reach
Also, throughout the process, you look for more leads!
“Getting Investment from Angels”
5/18/11
john@gophoto.com

6. Pitch Elements
Nutrition:
Value proposition to customers
●
Market size
●
Competitive landscape
●
Marketing / customer-acquisition plans
●
Exit strategies (esp. relevant to investors)
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Human capital (staff, advisors)
●
Cap table
●
Progress to date, with metrics
●
Taste:
How did you change the life of a customer?
“Getting Investment from Angels”
5/18/11
john@gophoto.com

7. Build a Great Pitch (iteratively)
Don't wait till your pitch is perfect.
●
It never will be
Get it in front of people soon & often
●
To get feedback
●
To spread the word
●
Feedback on your pitch doesn't just help your pitch.
●
It helps your business!
●
●
Hey, what's the competitive landscape like & how do you differ? What's your customer
acquisition/marketing plan?
●
Even once “near perfect”, you'll still always update it:
●
To customize it to each audience
●
To add “fresh” metrics / progress
●
“Getting Investment from Angels”
5/18/11
john@gophoto.com

8. Emotionally prepare for rejection.
Everyone on your team is pitching/helping
●
Everyone on your team is stressed
●
Even with a great business & great pitch:
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Talk to ~100+ people
●
Get 2nd rounds with ~20 people
●
Get 3rd rounds with ~10 people
●
Get investment from 2-5 people
●
That's “success”
●
And that involved hearing “sorry, but no” from ~100
people.
●
“Getting Investment from Angels”
5/18/11
john@gophoto.com

9. Networking & SEC rules
Only take $ from family/friends who can
afford to lose everything they invest....
… unless you are willing to lose them
Take only “gambling money”
You can only take $ from accredited investors
http://en.wikipedia.org/wiki/Accredited_investor
~$1M assets (other than house)
or >$200k/year income
You can NOT make public offers to sell private equity
No broadcasting it on Facebook/LinkedIn
“Getting Investment from Angels”
5/18/11
john@gophoto.com

10. Networking: How big is your
network?
About how many people “know you”?
What % do you really like?
People who
know you
You
Like
It's not just your friends who will help.
Often, an opportunity is found through acquaintances,
even people you don't actually like.
This is where the shallow/wide social graph helps best.
“Getting Investment from Angels”
5/18/11
john@gophoto.com

11. Good Networking is 1:1's
NOT talking to the cloud
You don't communicate well
on Facebook/twitter/Linkedin.
Everyone shouting to a cloud
Few listen
You communicate (/network) best
through a series of 1:1's.
I'm talking to YOU.
Attention, listening, change.
“Getting Investment from Angels”
5/18/11
john@gophoto.com

12. Facebook wall posts
Twitter
Borrowed from: http://headrush.typepad.com/creating_passionate_users/2007/03/sxsw_interactiv.html
“Getting Investment from Angels”
5/18/11
john@gophoto.com

13. So?
Yes, it's very difficult & long
● Go for it anyway!
● We need the $ to grow the biz
● The $ comes along with engaged investors
who offer advice & help.
● It's great practice.
● Entrepreneurs love challenges
●
“Getting Investment from Angels”
5/18/11
john@gophoto.com