“Leadership is a potent combination of strategy and character. But if you must be without one, be without the strategy.”
~ General H. Norman Schwarzkopf
I’ve had the pleasure of both meeting and interviewing Guy Kawasaki twice over the years. Guy gave me these two tips for attracting angel investors which are spot on.
- Make your story comprehensible to a spouse. The investment committee for many venture capitalists works like this: “You vote for my deal, and I’ll vote for yours.” That’s not how decisions are made by angel investors because the usual membership of an angel’s investment committee consists of one person: a spouse. So, if you’ve got a “client-server open source OPML carrier class enterprise software” product, you must make it comprehensible to the angel’s spouse when they ask, “What are we going to invest $100,000 into?”
- Sign up people that they’ve heard of. Angel investors are also motivated by the social aspect of investing with buddies in startups run by bright, young people who are changing the world. Even if the other investors are not buddies, investing side by side with well-known angels is quite attractive. If you get one of these guys or gals, you’re likely to attract a whole flock of angels too.
Better Than Venture Capital?
Venture capital is great… if you can get it… but if you aren’t raising $2 million or more, you’ll only waste your time chasing it.
So how can you raise from $50K to $2 million from investors without chasing “venture capital”?
I advise entrepreneurs to focus on raising angel funding.
It’s much easier to raise.
And you give up much less of your business.
Today’s Question: What highly successful Internet shopping website launched in 1995, but didn’t become profitable until 2003?
Previous Question: What popular children’s toy has been used to train management consultants to be more creative?
The Danish firm LEGO® has transformed its popular plastic building blocks into a business resource called SERIOUS PLAY™. The LEGO® SERIOUS PLAY™ process entails a facilitator posing a question to a group of management consultants which must be answered via building something with Lego. Each consultant then tells the story behind his or her creation, leading to dynamic discussions about an organization’s strengths, weaknesses and challenges.
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