Myths of Angel Investing
“It took 8 investors, 5 phone calls, and 3 face meetings…Funding closed in 2 months and 10 days.”
Photo Credit : LinkedIn,
October 2013: I met an entrepreneur - brilliant, passionate and determined to build a successful company. The customer traction and validation was in progress and you could see the dogged approach of the entrepreneur in closing new deals. There was fierce conviction that this was a nascent market that would yield high returns.
Then this entrepreneur chose to raise angel investment via an online platform of angel investors. It took 8 investors, 5 phone calls, and 3 face meetings. All investors were tech-savvy, brought in smart money and were geographically distributed - from Singapore, US and India. Funding closed in 2 months and 10 days.
What worked well and our key takeaways of how to raise angel funding via an online platform:
1. The founder spent time creating a powerful, compelling video - which we believe really made the difference in convincing remote investors! Imagine being able to talk to hundreds of investors in the comfort of your desk and convey your conviction on why they should be part of the journey.
2. Take time to create a compelling Investor deck that explains everything clearly. Investors are intelligent and smart - they understand when they see a well thought through deck. Don't make assumptions and don't be vague. Review, listen to feedback and improvise - again, again and again. There is never a perfect deck, so continue to update the deck online. Stay current.
3. Acknowledge an investor who shows interest. You can never be too busy for an interested investor - so be responsive and keep the engagement active. Feedback online is quick, so it helps gauge genuineness.
4. Believe, Believe and Believe. There are companies which have been bootstrapped and become successful without angel money. If not investors, you might find experts willing to support and angel willing to work with you before he finally bets the green currency.
Myths we busted:
Myth 1: Credible founders and good startups won’t come online to fund raise.
Reality: There is a well-known tier 1, content generation startup and its founder is a passionate entrepreneur with a solid tech background.
Myth 2: Indian entrepreneurs are worried their idea will be stolen if they create their profile online.
Reality: We have 12,000 startups till date on LetsVenture, with at least 10 joining at an average every week. Startup founders have complete control on privacy for sensitive information.
Myth 3: Investors need to talk to the lead investor before deciding.
Reality: Sahil closed all the discussions by himself, with his startup profile updated on the platform.
Myth 4: Investors take time to decide and want to meet face-to-face before deciding to commit.
Reality: One of our investors discovered, connected and decided to commit within 12 hours.
Myth 5: Investors don’t spend time looking at startups online.
Reality: We see investors actively engaging with startups, and scheduling meeting requests. Data analytics does show high engagement beginning to happen online with some leading to commitments.
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house
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