Attracting Pre Seed Funding from Angel Investors [PODCAST]

Securing investment funds to support an early-stage business can be a significant challenge. 在最近的一集 交易摘要, 乔·赫尔曼 得到了内幕消息 里德·罗宾逊 of 槽的资本, whose firm provides angel investor and venture capitalist funds to emerging businesses throughout Minnesota.Listen to this episode to learn how Groove looks to sources such as incubators to recommend prospective funding recipients and what it takes to get your up-and-coming enterprise on the short list for angel investor consideration.

天使投资人或风险投资人vs. 私人股本 

槽的资本 operates as both a venture capital funder and as an angel investor. As a traditional VC, the firm draws from a pool funded by multiple venture capitalists. 它在早期投资了许多企业. The hope is that those investments produce higher returns for 投资者 because they are so early. 

然而, companies that are still in the proof-of-concept stage or are only a year or two old do not yet qualify for VC funding. So 槽的资本 separately provides angel investor funds – typically smaller sums around $100,000 to founders they believe have what it takes to move their business forward. Angels often receive greater equity for their investment because the risk is greater.

Angel and VC funders rarely, if ever, get involved in business operations. 

“I would say private equity is much more involved than venture capital 投资者,” says Reed. “我们的投资还处于早期阶段, 我们投资了很多公司, we can't possibly be responsible for dramatically influencing every single one. So we come in, we provide capital and provide a network, that's really the extent of it. 我们对P不负责&L或现金流或其他很多…私募股权, 另一方面, 还是更关注运营方面.”

Private equity 投资者 are usually heavily involved in advising or otherwise guiding operations and financial management. That is not to say angel 投资者 will not study your financial statements, Reed warns.

联系天使投资人 

Opportunities to invest come from a wide range of sources including:

• Other institutional 投资者 for which the company in question is not a good fit
• 其他个人天使投资人
• Founders of other companies (start-up founders often know one another well enough to refer with confidence)
• 服务提供者，如律师和会计师
• Entrepreneurial support organizations such as incubators and accelerators that house and provide basic functional support for emerging companies

“We have very close connections with all of those here in Minnesota,里德说。, adding “we are actively trying to figure out which are the best ones within each of these programs that we want to invest in.”

每年，槽的资本都会举办 天使的节日, a 1-day conference that brings angel 投资者 and those people interested in that space together in the Twin Cities. This year’s Angel Fest is Thursday, June 2 at Huntington Bank Stadium in Minneapolis. 

审查程序

因为天使投资人的支票数额相对较小, 槽的资本 is able to do multiple deals each month. 在漏斗的顶端, 他们可能会考虑20-40个机会, paring that number down as they perform due diligence on each candidate. In a given week, they may sit through five or six 40-minute presentations.

Still, there is not much performance data available since the investment prospects are so new. Therefore Groove uses two other criteria to make investing decisions.

的人

• 这个团队是谁??
• 他们的背景和专长是什么?
• Are they the right people for the job – the ones who can make this specific business succeed?

市场机会

• Is the marketplace so vast that this company can not succeed unless they have very precise positioning?
• 市场在增长吗??
• 它是超级竞争还是蓝海?

Groove is looking for visionary leaders who can also perform as functional builders to develop their teams and company. 但他们也必须是卖家. 在市场方面, there must be enough evidence that any investment will produce a substantial return.

Groove使用了一个要求财务的模板, 法律, and IP information as well as resumes for the founder and key team members and customer references, 如果有任何. The information goes into a “data room” to be reviewed and assessed. 结果是创始人面临更多的问题.

“What we’re trying to understand is how they think,” Reed explains. “Do they understand the way that this business works? If we change an assumption just slightly and it dramatically explodes the revenue model, 那么, 你证实了这个假设吗? 我们来谈谈这个.”

Groove invites angels and subject matter experts to participate in this process, to help dig deeper and get a clearer picture of the emerging company’s viability.

“Every new person adds a whole new layer of expertise,” says Reed. 他们介绍自己的朋友, 他们会介绍其他企业, and now all of a sudden it makes the quality of the investments increase with every person.”