Talking to Angels and Whales

How to win over the right kind of investors for your innovative startup.

I often hear people say that raising money is hard. Frankly, it is intended to be. However, the process is harder than necessary when entrepreneurs aren’t well-versed in the capital markets and the mindsets of those who typically invest in early-stage businesses.

In fact, seeking out investors is often easier for an early-stage venture than it is for an established company. The key is to understand the different kinds of investors and what they want to see.

Look for Lone Angels

After “friends and family” have been exhausted, and independent of any grants, awards and microloans, the first stop on the road to funding is the individual angel.

The angel’s role is simple: invest amounts of money that are not terribly meaningful to him, typically up to $100,000, behind a concept he finds attractive, in a market he thinks is attractive.

Since you likely are still developing your minimum viable product (MVP) and are precommercial, your only salable product is you.

The angel makes very few investments, so your pitch must be perfect and differentiated. You will have five to 10 minutes to capture the angel’s imagination, so you must be concise.

This is an investment in you and only you. If you fail here, it is because you did not sell yourself.

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