Chances are the odds are against you.
Only one company in 50 or even a 100 actually will find funding, according to a panel of CEO’s and Angels talking about the secrets of seed funding for DCWEEK’s “Secrets of Seed Funding”. To make matters worse there is a catch. Not all angels are perfect for your company.
Panelists speaking at DCWeek included: Angels: John Lapides, Shadowpoint Capital Dan Mindus, New Vantage Group Frank Ball, New Dominion Angels Errol Arkillic, National Science Foundation CEOs: Mathew Baker, CEO, Bid 4 Assets Steve Woda, CEO, KidSafe Bonnie Rishell, CEO, ROI2
Their advise for start-ups: choose your partners wisely, fundraising is an investment in time and one can never start early enough.
Panelists encouraged those attending to start building your relationships now. People expect the funding process to take a month or two, when, in reality, its more like six.
One of the secrets to helping to close that deal and bring angels in to invest in your company is to have a compelling event. That event will be the deadline needed to force them to make a decision. Forcing something to happen helps to bring about a closing. Sometimes without the event you will not be able to get the investment you are looking for from angels.
Investors also want to invest in assets that are undervalued. Your job is to show how big your company could be and give them compelling reasons to want to invest in you. One of the ways to find investment is to show that a business plan is strong enough to continue to grow without angel investment. Nothing makes vc’s salivate more than a company that doesn’t need the money.
Lastly, know your numbers inside and out. Investors want to see a Plan A,B,C,D an E. They will ask you several what if scenarios that they see other start-ups run through, and if you cannot provide answers you will appear to not have the details ironed out.
Be sure to demonstrate your passion and cold-eyed realism about risk and realities you face. Let the investor know you understand the odds you are facing and convince them that their investment in you will pay off.
Investors are not interested in being your partner for life. They are interested in an exit strategy so they can move on and cash out.
