Hot answers tagged angel
19
In my opinion, these figure seem very very investor-friendly.
Basically, you're valuing your business at only 100K. It's hard to tell if that valuation is in line with your business but a 100K valuation is pretty low. If ordinary shares in the UK are the equivalent of common stock in the US, then that point is good for you. But I'm pretty sure you'll also ...
15
AngelList is rapidly becoming the hub of a huge amount of angel activity.
My understanding is that it's very simple:
entrepreneurs post descriptions of their business idea
the full feed of business ideas is read by a small team, who pick out the best ones
angel investors can subscribe to either the filtered feed of the best ideas, or the whole feed
if an ...
15
At a basic level, with that shareholding configuration, they can band together and out vote you 60% to 40%. This is a concern but relationships and getting everyone onboard with direction before discovering it is the wrong choice should cover this.
You need to match this against "where would I be without it".
I would be trying for 40% to them, holding ...
12
Well, if you refer to them as "Mr. know-it-all Kevin O'Leary and smart ass Cuban" I think you've answered your own question. Why would you even consider trying to enter a business relationship with people you don't like? If you're in it just for the money, that's the wrong reason. If someone invests in your company it's like getting married -- you probably ...
10
A rough bulleted summary of each:
A typical Angel:
Investing their own money
Smaller amounts of money $25K, $50K, maybe as high as $500K
Early stage / seed stage
Usually business person or retired business person, successful in their own right
Want to get a return, but it is more like a hobby
Want to help you build a successful business and help and ride ...
10
Hey Ron. I'm sorry about getting laid off, that couldn't have been fun. If you want a quick bolt of inspiration read Steve Jobs take on getting fired:
http://news-service.stanford.edu/news/2005/june15/jobs-061505
You should stop analyzing this situation and give yourself a short deadline and build something. Whatever it is your dreaming about, there is ...
10
Seriously, your pitch is: "this site will not make money. Plus it's too much work, so I don't feel like doing it".
And you expect to convince an angel investor to write you a check? Right now, you sound like you are in need of a quick lesson in how the real startup world works. I know it's a bit brutal, but check out how the pros do it and read all of ...
10
Slatecaster, LAV, our apologies for not getting back in touch with you.
When we first started out, we used to screen all of the pitches and decide which ones went to the investors and which ones didn't. Back then, it made sense to "accept" or "reject" applications.
However, since then, we've moved to a crowdsourcing model. When you submit your pitch, you ...
9
VCs tend to invest other people's money (and more of it at any one time), but angels invest their own. Also, they have different motivations and different profiles. Angels aren't just in it for the money - they tend to want to be part of something successful, feel the thrill of being back in the game and have bragging rights with their mates (my investment ...
9
I started writing an answer to this question, but I got so motivated I ended up turning it into a blog post. The full post can be found on my blog. Here’s a summary.
I'm a Hispanic female.
I’ve wondered about this a lot. I've thought about all the usual reasons people say there is such a lack of minority-owned startups, but none of these reasons made ...
8
Some companies spend six months trying to find investors. They knock on 1000 doors and finally, after six months, find some dentist in Cleveland to invest $50,000 on crappy terms. Then they discover when the $50,000 runs out that the dentist was not a good investor because he's not a part of the right networks, he can't make the right introductions, and the ...
8
What is an angel investor?
An angel investor is almost always a wealthy individual investing his or her own money in new startups (as opposed to managing a large fund of money on behalf of an institution).
Almost all angel investors made their money by selling their own startup successfully.
Angel investors almost always invest smaller amounts. These days ...
7
Paul Graham said he looks for companies with at least two founders, because it proves that the idea was good enough to convince at least one person. That reasoning make sense to me: if you haven't been able to convince one person that your idea is going to work, your chances are significantly dimmer.
7
It's true that often they look for multiple founders, because you'll need multiple people and it's nice to see the team is already there, rather than having to fill a key function (like CTO).
But don't let that stop you. Just make it clear that you know the holes in your knowledge and that you expect them to plug them with people they like.
VCs and angels ...
7
Money? You're asking for money based on an idea? The people who put money into that are traditionally the three F's: Friends, Family, Fools.
Bootstrap is the route to go, and not the semi-bootstrap route you suggest, but closer to your third option. Build the product on nothing but what you can put into it, and try to avoid spending much on it if possible. ...
7
The investor will want to know:
Who you are, why he wants to work with you and what sort of "proof" you have that you'll be a good startup exec/leader.
Market opportunity, pain point to be addressed by your product
How the product is different, better, protectable. Roadmap of development plus a demo of what you have.
Sales and marketing strategy. Many, ...
7
I could be all wet here, but I don't think you should. Partners should not be just for getting investors, they are mostly to get you to where you want to be - and you are mostly there already. I think you should look at it as an advantage - that you have the flexibility to bring people in when they are needed.
7
Empirical evidence of potential success (small case studies/tests) may be more important than a well-constructed plan -- the plan will mature as investors work with you to flesh it out. First, you have to hook them with an idea. At the same time, here are some questions you should make sure you know the answer to before approaching them (forgive the number ...
7
Although raising money while still working is doable, it's a lot harder (I'm speaking from the perspective of someone that's done it recently). I'm not saying you can't, but I am saying that you should go into it with eyes open.
Some investors will consider it a deal breaker. You'll need to learn to take it with a grain of salt - it's just that some people ...
6
I think the reason single-founder-startups rarely get funded is that if the problem you're trying to tackle is "small" enough for you to be able to solve it reasonably well on your own, you're probably not VC-material.
VCs care about BIG problems that can make them MILLIONS of dollars. If your idea is BIG like that you'll likely not be able to even get to ...
6
Unfortunately, you don't have many options. If the company has truly failed, then your money is most likely gone. It also depends on what type of investment you have. If you actually have stock or convertible notes.
If you have stock, then you need to look through your agreement and figure out what your voting rights are. You can then talk with other ...
6
If you are pitching a VC, then team is important. More important than that is what you built and can it make money.
A VC will want you to build out your team quickly and might even provide team members for you.
One thing you should look at is why your partners left. They will certainly ask that question.
The real advantage of more team members, at this ...
6
You may get lucky and get investment for just the idea but it is unlikely and if you do it will be expensive (i.e. higher % of equity for the cash).
At minimum you should start proving the idea before seeking investment. You do this to reduce the risk to the investor so stand a better chance and the investment will be cheaper for you.
There are a couple of ...
6
The big buzz these days are that Business plans are for established businesses. Startups are in search of a Business model (see gurus Steve Blank and Eric Ries).
Steve Blank have some great arguments against the Business plan in startups here.
So, you need to spend some time with is your Business model. Here is a good book about Business modeling.
...
6
Congradulations! What an exciting time.
This is my formula (everyone has their own)
The problem
The solution
The opportunity
The team
The numbers
The pitch
You should be able to do these in one sentence. Or one paragraph. Or one slide. Or one page.
Collateral
I walk in with:
A good presentation that is no more than 12 "slides".
A 1 page ...
6
No; it doesn't even make sense to give the CEO preferred stock. The "preference" in preferred stock is usually a liquidation preference, giving the holder of the stock the right to get 100% of their investment back before anyone else takes a dime. This makes sense for an investor that has put in money. As the CEO has not put in money, it doesn't make sense. ...
5
Single founder companies do get funded. All the time. I've angel-invested in a few myself.
Having said that, I'd still advise finding one or two co-founders. Even if you are exceptional at various things (sales, product, marketing, finance, etc.), startups can become a lonely business and it's nice to have someone you like, trust and respect to work ...
5
There are a lot of different scenarios that can play out here. There would presumably be some language in your investment agreement that explains what your options are in the event of a significant change in ownership of the company and what you are allowed to do with your ownership.
Probably the most common one is for the company to get bought by another ...
5
With all SaaS companies, no investor nor customer will give you the time of day without some sort of demo, beta or whatever that is functional. Screen shots and mock-up just don't cut it since the barrier to building SaaS applications nowadays is really low. So, you have to build something to show people, regardless of the path you take.
You do need to ...
5
There are plans for doing business, and then there are "business plans".
For example from Y combinator:
Q: Do we need to write a business plan?
A: Not for us. We make funding decisions based on our application
form and personal interviews. We love
demos, but we never read business
plans.
Most investors are investing in you first, idea ...
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