I'm currently raising capital for our startup and I have my first meeting with an angel investor next week. We are have achieved product/market fit, are ready to launch and are looking for $1.5 million, probably from several angel investors.
I know there are a lot of articles out there about pitching and raising capital - and I've read a tonne of them - but I would like to hear from those of you who have raised capital about the approach you have taken. What tips can you give me to get the signatures on the term sheet?
Congradulations! What an exciting time.
This is my formula (everyone has their own)
You should be able to do these in one sentence. Or one paragraph. Or one slide. Or one page.
Collateral I walk in with:
Team Effort Remember you are selling yourself and your team as much as anything else. Make sure that your team works as a team. You demonstrate your confidence in your team by allowing them to talk and participate in the dialogue.
You have competitors It is not a trick -- but a best practice. You may be asked who your competitors are. "No one" or "We don't have one" is not really a very good answer. There is always a competitor. "The status quo" is a competitor. Non-website alternatives to addressing the issues is a competitor. Get out of your market niche space and think about the decision making process of a customer and what are all the "competitors" to them choosing you!
I have raised around half that amount in any one round, but I have recruited a range of specilists to work with us on projects, so here is my 2 cents ...
Tricks, never worked, enthusiasm and a solid plan for the product did.
These days I focus on the roadmap, what comes first (can't live without), what will wait (features to draw most people), what we will most likely take input from the market about (things that could go either way).
Honesty about the costs, development, marketing, sales and support. Take it year by year, talk in numbers of people needed to meet demand ... don't make up some magic figure say average $80K per person, 3 dev, 2 marketing, 1 support in the first year ... if it goes quicker we expect 2 more support and 1 more dev ... marketing should stay as is.
If there are several small investors then explain that you will only take their money IF you get the minimum required for one year ... But your aiming for 2 through 3 or 4 investors ... more an the dilution is to high and I wouldn't bother.
Good luck, let us know how it goes ...