Raising Pre-Revenue Angel Cash Is A PITA

[Andy Black]

In my personal experience the pitch success is based on 3 things:

1. People
2. Project
3. Pro-forma (Excel)

In that order. We make decisions with a croc brain and if we don't trust the presenter - the deal is dead. If we don't believe in the project - same story. But here is the thing, if you get the 1 and 2 right, 3 always works.

So I disagree with the line you quoted, Andy. Any imbecile can make excel numbers look good. All presentations look the same hockey stick roses and sunshine $billions in the future future, all alike. And guess what, 99.99% of all those projections are shit anyways. The economy will change, the situation will change - nothing will stay the same. The people will need to pivot and the project must survive and thrive.


On this forum I've been thinking how I can add value. I am not a great entrepreneur yet, I am learning sales, marketing and many other skills. But there is one thing I have been doing for a very long time and successfully - it is my THE ONE THING (referencing @SteveO post from way back) - it is putting capital together, raising money. I love being in the room and making that pitch. And it all comes full circle, for me to get excited the numbers must back me up. My process starts from #3 and moves up. The listener will see it in my body language, in my conviction if I am real or full of it.

I wanted to share this as I know many people here are often struggling with their businesses because of lack of capital. But as @Kak said on his show, it is your job as an entrepreneur to take other peoples capital and do well by them. That is how empires are built. Hope some people find this post helpful.

Don't take that line too literally.

What I take from it is you present what's been done numbers wise, rather than present shiny images of imagined happy people using your products.

“We've got an audience of 1,000, had 50 enquiries, and 10 people have paid deposits.”

Kind of "Tell me what you've done and I'll tell you who you are."

 

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[SteveO]

@Vigilante

I tried to pm you. I have raised over 30M in money for apartment deals. This does not include loans from institutions.

There are three different groups that I went through and also have had about 20 individuals that have invested with me. I do have some experience here. Can't post much of this information on the forum.

 

[Gary]

So I set out to raise some angel money. Easier said than done.

@Vigilante , I wanted to thank you for posting this topic, and everyone for your stellar replies. This thread really stands out on the forum.

I'm developing a line of products in my industry. Development is fully funded, as is the first run of production. However, from the get-go I have been working with an advisor I've long admired to help me structure both my pitch and and approach to raising capital. I have been offered funds already from multiple accredited individuals, though I won't be taking any until after the product hits the streets. I've already secured distribution (THE key in the alcohol business due to tied-house laws) and some commitments from high-profile retailers.

Nevertheless, I will need significant money to reach my goals (multi-million valuation, not billions), so I will be glued to the advice everyone is offering you.

 

[Vigilante]

@Vigilante

I tried to pm you. I have raised over 30M in money for apartment deals. This does not include loans from institutions.

There are three different groups that I went through and also have had about 20 individuals that have invested with me. I do have some experience here. Can't post much of this information on the forum.

I will reach out offline.

 

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[Vigilante]

So I started binge watching Season 2 of UnderCover Billionaire last night, after a brief discussion with @Kak

One of the things I LOVED about UnderCover Billionaire Season 2 (after 2 episodes) is

Grant Cardone saying (as he is building) that he is looking for WHO HAS HIS MONEY?

I have NEVER been a huge Grant Cardone fan, but the GRIT and determination is worth emulating.

There is no doubt that every dollar that I need to fund this company is out there.

There is also no doubt that the business meets the CENTS profile from The Millionaire Fastlane .

The only thing that will ever keep me from this.... is .... ME.

I just have to find out where the money is currently being stored. And when I turn the first $5m into $20m the flood gates open.

 

[Vigilante]

I have to say,

I had no idea how much I missed you all.

There's no place out there like this place.

This shit is NOT EASY (regardless of the POLL RESULTS) but there's already two pages worth of life changing advice on this thread alone. And that is because of who YOU are, not who I am. I am just soaking it all up, and taking action on what you say.

Real problems turn into real solutions at The Fastlane Forum.

So thanks....

 

[BlindSide]

I have to say,

I had no idea how much I missed you all.

There's no place out there like this place.

This shit is NOT EASY (regardless of the POLL RESULTS) but there's already two pages worth of life changing advice on this thread alone. And that is because of who YOU are, not who I am. I am just soaking it all up, and taking action on what you say.

Real problems turn into real solutions at The Fastlane Forum.

So thanks....

I'm happy your back @Vigilante! Looking forward to more GOLD posts coming from your experiences.

 

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[DaisyH]

I could write a book about all of the ways NOT to raise money. Having previously bootstrapped a few companies, I wanted to do this one completely differently. I know that I have something that can reach massive scale quickly, but it requires more than some fancy new business cards and a Regus virtual office.

So I set out to raise some angel money. Easier said than done. I have an ALL STAR cast (on my board of directors), a great business model. Development has been fully funded, and all of the pieces are in place. Brand is an A+ (license deal) and there are customers that are ready to buy.

So I am in dialing for dollars mode. A couple of referrals to angel investors from board members didn't pan out yet. Soliciting cash COLD by calling a whole list I received of angels has not panned out - it's not WHAT you know, it's WHO you know. I've contacted over 30 early investor funds, all with the same results. ::crickets::

So I am talking with one accelerator, and that could work if they will take me into this year's "class." Essentially they provide the angel round (enough to operate for 6 months +/-) and then they walk you through a multi-million dollar first round of financing. But, that's after they take you formally into their program.

People invest in people, not ideas. But you have to find the RIGHT investor to come in pre-revenue. I thought my all star cast would have been enough to attract the cash. It's not. I literally have one of the most impressive rosters for a startup I have ever seen, and all are willing to work for next to nothing to get it off the ground.

Most of the businesses you will read about here at the forum, including mine in the past, were bootstrappped to viability. But I am looking to create a billion dollar company, not a million dollar company. I can't do that by rubbing two nickels together.

So, I grind away until we find a way. It's NOT enjoyable. But long term, I believe in where we are going and I have to make other people believers to get the company off the ground.

I wonder if you have considered finding financial partners/potential investors by looking for the funds from companies vs angel investors ( who seem to be mostly private individuals )?

The most likely candidates are those who would stand to benefit in some way from your success -the old win/win scenario. Think of what industry or spin off industries would likely be associated with your new business ?

A true vested interest -one that provides more than just the one usual return (money/financial ) may be an easier sell than just pitching to random investors.

If you can find companies who can benefit from aligning /investing in you , then they get to benefit as you grow via financial returns, possible exclusive deals with your company, industry cache , and also they can usually open other doors by assisting with industry connections, suppliers, and by being able to associate with their already established market presence, which lends credence to your new business and can usually speed up your whole plan. Another factor is that they may be the well you can keep going back to for money as you grow or need more funding rounds , rather than having to take the dog & pony show on the road again .

In the past, I was part of a start up that also had potential to be a billion dollar, world wide business. We were courted by a multinational company ( who wanted to invest and have part ownership ) that was
on the periphery of the new business and could see the potential of investing in this business, as it would create a dominating effect for the entire market space if combined.

This deal would have immediately have launched us as a player in this market, by being able to work with their money and pipeline however it was an opposite scenario with us, as the founder was determined to bootstrap and could not raise the necessary capital do so and in the end the company imploded. Such a pity.

Sometimes when you’re totally immersed in a business it can be hard to think from an outside perspective . Have some friends or colleague look at your proposal with you to help with brainstorming -first think of all the industries that could be good alliances for a possible investment, then narrow that down to ones that would be the best fit. From there you can start to do research on who the top companies are in those spaces , and narrow things down even further to see which companies have ever invested outside . A lot more companies are now interested in this scenario , open to “outside innovations”, whereas previously, new product development was only done in-house. For this type of research you can find some great, very reasonably priced freelancers on Upwork.

I wish you great success.

 

[Vigilante]

I wonder if you have considered finding financial partners/potential investors by looking for the funds from companies vs angel investors ( who seem to be mostly private individuals )?

The most likely candidates are those who would stand to benefit in some way from your success -the old win/win scenario. Think of what industry or spin off industries would likely be associated with your new business ?

A true vested interest -one that provides more than just the one usual return (money/financial ) may be an easier sell than just pitching to random investors.

If you can find companies who can benefit from aligning /investing in you , then they get to benefit as you grow via financial returns, possible exclusive deals with your company, industry cache , and also they can usually open other doors by assisting with industry connections, suppliers, and by being able to associate with their already established market presence, which lends credence to your new business and can usually speed up your whole plan. Another factor is that they may be the well you can keep going back to for money as you grow or need more funding rounds , rather than having to take the dog & pony show on the road again .

In the past, I was part of a start up that also had potential to be a billion dollar, world wide business. We were courted by a multinational company ( who wanted to invest and have part ownership ) that was
on the periphery of the new business and could see the potential of investing in this business, as it would create a dominating effect for the entire market space if combined.

This deal would have immediately have launched us as a player in this market, by being able to work with their money and pipeline however it was an opposite scenario with us, as the founder was determined to bootstrap and could not raise the necessary capital do so and in the end the company imploded. Such a pity.

Sometimes when you’re totally immersed in a business it can be hard to think from an outside perspective . Have some friends or colleague look at your proposal with you to help with brainstorming -first think of all the industries that could be good alliances for a possible investment, then narrow that down to ones that would be the best fit. From there you can start to do research on who the top companies are in those spaces , and narrow things down even further to see which companies have ever invested outside . A lot more companies are now interested in this scenario , open to “outside innovations”, whereas previously, new product development was only done in-house. For this type of research you can find some great, very reasonably priced freelancers on Upwork.

I wish you great success.

LOVE THIS IDEA and will look into it

 

[Andy Black]

LOVE THIS IDEA and will look into it

I love it too.

The longer I do this the more obvious it becomes that building relationships and win-wins is the way forward.

 

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[GPM]

I will be following this thread closely! A topic near and dear to my current heart.

I'm listening to "be obsessed or be average" by Grant Cardone right now. He says something in there along the lines of being ignored when raising capital when he asks for a few million, but is taken seriously when he asks for more like 100 million.

 

[Vigilante]

I will be following this thread closely! A topic near and dear to my current heart.

I'm listening to "be obsessed or be average" by Grant Cardone right now. He says something in there a long the lines of being ignored when raising capital when he asks for a few million, but is taken seriously when he asks for more like 100 million.

Fascinating.

https://www.amazon.com/dp/B016VRFTR4/?tag=tff-amazonparser-20

 

[GPM]

Fascinating.

Amazon.com: Be Obsessed or Be Average eBook : Cardone, Grant: Kindle Store

That's the one. I highly recommend listening to it on audible. Grant reads it himself and his energy is through the roof.

 

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[Tiago]

This thread is already gold-worthy. Welcome back @Vigilante!

 

[MTEE1985]

I will be following this thread closely! A topic near and dear to my current heart.

I'm listening to "be obsessed or be average" by Grant Cardone right now. He says something in there along the lines of being ignored when raising capital when he asks for a few million, but is taken seriously when he asks for more like 100 million.

I remember that part standing out to me. I also saw it in real life when helping to raise money for a company. I was working with Koch Disruptive Technologies to possibly fund the project and at the end of the day the ~$5m that we were looking to raise didn’t excite them enough.

The longer I do this the more obvious it becomes that building relationships and win-wins is the way forward.

Interestingly in that same process I asked Chase Koch who runs that arm of the company what the one skill is that he would recommend to new entrepreneurs and his answer was: “Interpersonal skills. Ability to network and understand how you add value to other people. Look at every relationship thru the lens of mutual benefit. If you can figure out how to help people, most will return the favor.”

 

[Antifragile]

I remember that part standing out to me. I also saw it in real life when helping to raise money for a company. I was working with Koch Disruptive Technologies to possibly fund the project and at the end of the day the ~$5m that we were looking to raise didn’t excite them enough.




Interestingly in that same process I asked Chase Koch who runs that arm of the company what the one skill is that he would recommend to new entrepreneurs and his answer was: “Interpersonal skills. Ability to network and understand how you add value to other people. Look at every relationship thru the lens of mutual benefit. If you can figure out how to help people, most will return the favor.”

Is this the same Koch family with the billionaire brothers? Koch Industries?
Very cool.

Also, 100% agree on the adding value to others. You'd be surprised what you can achieve if you just help enough other people get what they want. Rockefeller said that he'd pay for the interpersonal skills more than any other. He did alright .

 

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[Gary]

I have to say,

I had no idea how much I missed you all.

There's no place out there like this place.

This shit is NOT EASY (regardless of the POLL RESULTS) but there's already two pages worth of life changing advice on this thread alone. And that is because of who YOU are, not who I am. I am just soaking it all up, and taking action on what you say.

Real problems turn into real solutions at The Fastlane Forum.

So thanks....

@Vigilante any updates you can share with us?