Startups
Every day as a startup founder you face many choices. Where should you go next with product development, customer acquisition, new investors, hiring more people, changing vendors, streamlining operations, and more? It can be overwhelming. Very often the answer begins with first addressing the key strategy question: What is it time for, now?
Read MoreYou have a great new business idea, you have built the minimal viable product (MVP), you have some initial revenues -- and now you want to raise some angel funding. What do you do next? Before you reach out and apply to every angel group in town, consider the following.
1. Determine how much you need to raise and the milestones you will hit
Founders “sell” milestones to investors and leave it to investors to ask themselves two questions: 1. Will this team hit these milestones with this amount of capital raised? 2. If they hit the milestones will they be attractive to the next round of investors?
Be cautious about how much money you ask for in this round. Ask for only enough to prove the next level of market and product traction, building in a bit of a contingency. If you shoot too high you may have to score with multiple angel groups, spend the next six months fundraising, and risking having to return the money if you do not complete the round.
2. Create your elevator pitch
Write a 30 second pitch that you could deliver in a ride in the elevator, with no props. Try it out on people and refine it until it is just right. This pitch could be your outline for your pitch deck, which avoids the common problem of including slides in a deck just because the writer already had some great graphics
Read MoreFounders can rightfully celebrate when they successfully raise their angel round of investment. But now the tough work begins to take the company to the next stage. As an investor my advice for startup founders includes the following:
You likely made promises to your angel investors for targets such as number of customers, revenues, profitability, product functionality, key hires, or filing for patents. Meeting or beating those milestones will be critical to raising your next round of funding, because investors will judge the company’s progress against those metrics and promises. Lay out specific plans for the metrics and KPIs (Key Performance Indicators) you will track and why, and the actions you will take to ensure you meet those milestones. Use whatever project management tools will work for you -- whiteboard, paper, or online tools. Be prepared at any moment to describe to investors your plan and your progress (good and bad) against it.
Most post-angel startups would be wise to put a strong board of directors in place to help guide the company. There should be at least one outside director who wi
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