Advanced Startup Pitch Techniques, or “How to Make an Investor Less Cranky”

The Web is scattered with hundreds (thousands?) of articles guiding you through creating the perfect investor pitch and pitch deck.  So rather than take you through “Pitching 101” again in this post, I thought I would hold the advanced class. Think upper division, past the entry level stuff.  Yes, we all know that you need fewer words on your slides, you need to dress for your audience, and you need to leave time for Q&A.  Google “How to pitch to investors” for more of those tips and tricks.

Now that you have the basics down, let’s start the advanced class.  Continue reading “Advanced Startup Pitch Techniques, or “How to Make an Investor Less Cranky””

How to Raise $1M in 26 Days

As an active angel investor, every week I speak with founder/CEOs who are seeking funding for their companies.  About 3-5% of these conversations lead to investment.  These numbers are comparable to the “hit rate” of founders who are seeking funds from venture capital firms as well.

If it is so hard to land seed-level funding, then why even try?  Because if you have a great vision, product, and maybe even a bit of market validation, then funding can be the fuel that accelerates your venture and allows you to achieve very big things. Continue reading “How to Raise $1M in 26 Days”

In the “Tank” with SandCloud

It was a Tuesday night when I got a call from my good friend and former co-founder Martin.  He said, “What are you doing at 6:30pm tonight?”  “Nothing,” I answered.  “Good.  I am picking you up and taking you to an apartment in Pacific Beach.  I want to see what you think.”

If you know Martin, this isn’t that unusual.  He and I are in a similar business.  I invest in startups.  He is an entrepreneur-in-residence for a major law firm.  We share deals.  And in a past life we raised $30 million for our own startup.  So there I was, getting into his car, headed to this mystery meeting.

Continue reading “In the “Tank” with SandCloud”

3 Decades of my business mistakes in 30 minutes

I had the honor of spending some times with my friends Millard and Andrew at Startup Talk Podcast. The result was a multi-decade tour of my trials and tribulations as entrepreneur and angel investor. You can hear the podcast here.

So if you are an entrepreneur or angel investor with 30 minutes to spare, take a listen and hear how you can benefit from 30 years of my mistakes (that is almost a mistake a year a minute!). From self-funding one of the first B2C Internet companies to raising (and then spending) over $30 million in venture capital, there is plenty to learn from the ups and downs of entrepreunership over the last three decades. Listen here at Startup Talk Podcast.

Do Angel Groups Really Write Checks?

In my travels talking to entrepreneurs, when the topic of angel groups comes up it is often met with a dismissive, “Those guys never write checks.”  Are these entrepreneurs right?  Sometimes.   But the reality is that great companies with great teams often get significant funding from angel groups, and it is that funding that sets the venture up for future success.

In my last post, I shared how my own company raised $2 million from Tech Coast Angels over 2 separate funding rounds ($1M each).  Was this an anomaly, or the norm?  Well the best way to answer that is to look at the data…

In 2015, Tech Coast Angels provided $13.5M in funding to approximately 50 companies.  In addition to the direct funding, TCA also supported its existing portfolio companies in raising an additional $82M from outside investors (mostly venture capital and other angel groups).  The 2015 TCA annual report can be found here

So, it sounds like angel groups do indeed write checks.  However, the above numbers don’t tell the complete story.  The reality is that well over 90% of founders who apply to TCA for funding are not successful.  This is on par with the success and failure rates of other funding sources such as venture capital.  So why the sentiment that “angel groups don’t write checks”, if the probability of success is similar to venture capital?  I think there are a few reasons…

While VC terms include a defined funding amount (typically $3-5M for a Series A), angel groups have to solicit their membership for individual investment from each member.  Thus, the entrepreneur who has a successful pitch is asked to enter into a due diligence process where the funding outcome is not clear.  Thus, an entrepreneur may enter the process seeking $500K, but may ultimately be funded at a level above or below that number.  And sometimes, a company that has a successful presentation and enters due diligence finds that they are turned down for funding early in the DD process when members learn more about the company.  Unfortunately, since angel groups are comprised of members of different experience levels and demeanors, sometimes the entrepreneur who falls out of the process becomes convinced that these investors are not serious and are wasting the entrepreneur’s time.

I will explore that topic in my next post, titled “Are angel investors a-holes?”