I do a lot of marketing.
I market via my website. I market via social networks like Facebook and Twitter. And I market via more traditional means like public relations and direct mail.
But when it comes to several of these marketing channels, there’s one thing I NEVER market, and that’s equity or securities.
You see, while you can market products or services pretty much anywhere, in the United States there are many laws the regulate the sale of securities, mainly the stock in your company that you may want to sell to individual or “angel” investors.
And specifically, these laws forbid “General Solicitation.” Which means that you can’t market your equity via Facebook, via Twitter, or via your website, and you can’t stand outside of a Wal-Mart and ask passerby’s to invest in your company.
So what should you do?
The answer is fairly simple – network.
You’ve probably heard of 6 degrees of separation. Six degrees of separation refers to the idea that everyone is on average approximately six steps away, by way of introduction, from any other person on Earth, so that a chain of, “a friend of a friend” statements can be made, on average, to connect any two people in six steps or fewer.
Now, I’m not saying that you should set your sights on Bill Gates or Sergey Brin as an angel investor in your company and figure out the six or less connections you need to make to meet them.
But rather, there are literally millions of successful entrepreneurs and business people all around you with the means, interest and ability to fund your company. These are the folks you should be trying to meet.
You need to start by making a list of these individuals. But more important than just finding wealthy individuals to meet, create a list of people who could really help your business.
For example, is there a top person in your industry whose credibility and/or connections could help you?
Or is there someone you’ve come across who has amazing marketing or technical skills that would improve your company?
It inevitably turns out that these same people generally have the means to invest in your company. And, if not, they generally have vast networks of contacts they can refer you to who might invest.
When you find angel investors this way, you get what we call “smart money.” That is, investors who not only give you the funding you need, but who provide the expertise, guidance and connections to make your company more successful.
In finding “smart money” angel investors, you’ll need to think more like an executive recruiter or “headhunter” than a fundraiser. Importantly, the following are the five key skills and qualities of a great executive recruiter that you’ll need to embody:
1. Identify the right candidates: a great recruiter can specify the ideal qualifications of and create a comprehensive list of potential candidates
2. Be outgoing: a great recruiter needs to get meetings with and speak with the right candidates; to do this, they can’t be shy
3. Have good listening skills: a great recruiter needs to conduct interviews and really listen to the needs of their clients and candidates
4. Be well organized: a great recruiter needs to create a big list of candidates and methodically and repeatedly contact them until they get their desired results
5. Be persistent: a great recruiter follows up on great candidates; they don’t let initial rejection deter them
To summarize, avoid mass marketing on the web when raising angel funding, and look for the “smart money” — people that can help you both fund and grow your company. And act like an executive recruiter; in doing so, you’ll be able to find tons of smart money angel investors for your business.
How To Raise Funding from Angel Investors
If you want to raise your first $100,000 (or more), click below to learn my battle-tested, 6-step funding formula for raising funding from angel investors