raising angel money
TRANSCRIPT
Raising Angel Money #angelmoney
About Your Hosts
Kevin SmithFounder and CEO
Erika MalzbergChief Marketing Officer
Who’s an angel?
• High/Very high net worth
• Live in tech hubs
• Typically invest locally
• Well-educated
• Part-time investor
• Sees 50-250 startups/year
• May be member of angel group
www.seedchange.com
What kind of companies do angels invest in?
• Companies who are in seed or early stage
• Diverse: In technology, clean tech, fin tech, healthcare
• Looking for: Solve a problem, management team, IP, business model
www.seedchange.com
How do entrepreneurs connect with angels?
• Full time, 12 hours/day, 4-6 months• Rely on your network• Must have persistence and outstanding
communications skills• Objectives
o Get introductions to 100-250 investorso Meet 50-100 investorso Follow up with 25-75 investorso Conduct diligence process with 25-50 investorso Get checks from 8-15 investors
Questions angels askProduct What’s your business about? Why will people use your
product?How do you make money?
Market How big is your market? Who’s your competition? Distribution?Have you talked to customers? Product-market fit?
Team How did the founders meet?Who is on (and not on) your team?
Risks What is the biggest problem you need to solve now?
Technology and IP
Funding Justification/Use of FundsMilestonesFinancial projectionsThink ahead to Series A
www.seedchange.com
Questions angels don’t ask(but they’re really thinking…!)
• Do the founders like each other?
• Do I trust you?• Can you sell?• Can you build a team?• Can we work
together?• Is anyone else going to
invest?• Why isn’t XYZ going to
crush you?
www.seedchange.com
Non-rational criteria
Founders
Do I identify with you?
Industry
University
Experience
Product
Cool factor
Resolving personal pain
Market
Personal experience
Interest
www.seedchange.com
Angel decision-makingtimeline
Contact
Meeting#2
Meeting #5
Meeting #6
Meeting#3
Meeting #1
Meeting#4
$
www.seedchange.com
Decision-making process…
Elevatorpitch
Pitchdeck
Founderinfo
ProductMarketBusiness modelCompetition
Domain expertiseIntelligenceCommunication skillsPersistence IntegrityRelationship
CustomerMarket sizeCompetition
Prob/SolutionTractionProduct-Market fit
Product overview
Market
Product
www.seedchange.com
Decision-making process
Tech Financials Deal Legal
Tech team Use of fundsMilestonesGrowth plan
AmountTermsInvestors
Regulatory threatFormationStock IP
www.seedchange.com
Funding Pitch Guidelines
• Tell a story• Problem• Solution• Market size• Business model• Competition• IP• Team• 10-12 slides maximum• One key point/slide: Backup data in appendix• Don’t read it from slides
www.seedchange.com
Valuations
What is the valuation of my startup?
• Based on traction
• Based on geographical comps
• Entrepreneur ask vs investor tell?
www.seedchange.com
Q&A and Thank You!
Kevin Smith
415 Jackson Street
San Francisco, CA 94111
www.seedchange.com
1.877.711.9883
@seedchange
Erika Malzberg
www.earlygrowthfinancialservices.com
415.234.3437
@EarlyGrowthFS