There are a couple potential reasons that you had such an initially poor experience trying to secure angle investment to your business:
- Your idea did not resonate with any of the investors that you contacted.
- Your business proposition did not resonate with any of the investor that you contacted.
- Your presentation of the idea did not cause it to stand out from the hundreds/thousands of ideas and businesses which angel investors receive every week.
- Your "turf wore" your proposal by sending it to too many people who talk to each other and did not find it reasonable.
- You didn't get to the right person.
I am sure that there are many others, but let's look at these five and see what we can learn:
If your idea did not resonate this may be because:
- You didn't tell the story well.
- You didn't make the case -- they didn't believe you
- You didn't target the pitch to an investor with interst in the subject
If your business proposition did not resonate this may be because:
- You didn't demonstrate sufficiently how the business would make money
- You didn't demonstrate sufficiently the market size
- You didn't adequately address how you would gain access to the market
- You didn't answer an obvious question (Usually one like -- why buy this when will do?)
If your presentation did not stand out this may be because:
- You did not send your presentation from from someone the reader knew
- You initiated contact through a generic form generated auto-submitted from a website
- You didn't make the case with a visual/pictures
- Your team did not include names the person recognized
If you "turf-wore" your proposal this may be because:
- You sent it out to too many people over too short of a period of time.
If you didn't get it to the right person this may be because:
- You didn't selectively choose potential investors who had the skill to understand your proposal
- You didn't selectively choose potential investors who had an interest in your business category
- You didn't get through the "check" by a "industry expert" which the investor uses to filter proposals
These may be the reasons, they may not -- but in all likelihood it was a combination of some of the above.
Notice in all of the above I made the subject -- you. Not because it is always about you. But in the end if you don't take responsibility for the outcome, there will be no one to blame but you. Blaming investors either directly or indirectly for the outcomes is like blaming a kid for not buying a specific chocolate bar. Kids like chocolate bars. If they didn't choose yours there is something wrong with it. Even if there IS nothing wrong -- it still is your responsibility to do something different and blaming the investor (or the kid -- they are shockingly similar sometimes) solves nothing.
What do you do now?
So, rather than blamming the angel investor market-- what can you do? Here are 4 ideas:
- Start small. Contact one local person. Get feedback. And improve the presentation.
- Go to business support networks. Connect with an investor through netowrkring. Make a presentation of the material. Get feedback. Improve the presentation.
- Stop trying to raise money until you are farther along (see below)
- Secure professional support. There are people in the business of polishing up your story and then leveraging their own connections and relationships to raise money. Some are good. Some aren't. Some will be good for you. Some wont. If you choose well, this could be the best money you spend.
Put Time on your Side
In the end, raising money takes a lot of time and energy. While you are developing and implementing a good strategy ot raise the money-- you should continue the development of your product in such a way that you will be able to engage real paying customers. The more real market traction you are able to garner the better your prospects for finding funding.
The Cost of Money
The bonus of getting the traction during this critical time is it will decrease the cost of money. When your business is an idea it comes with a termendous amount of risk. An investor putting money into the business will be compensated in accordance with the risk that they take.