Entrepreneur Readme: How did I find my seven angel investors

Intermediary transaction http://www.aliyun.com/zixun/aggregation/6858.html ">seo diagnose Taobao guest cloud host technology Hall

Guide: The author of this article Yaniv Nizan is an entrepreneur who provides an app for mobile gaming. He recently managed to complete a round of financing and found 7 angel investors. But looking back on the financing experience, it's not easy. He didn't know how to introduce his company to investors.

He now publishes his own fundraising experience on his personal blog for more people to understand.

When I started creating Soomla, I didn't find it difficult to raise money. Because in 2008, I and others together to create the first company, I was in this field is still green. And now I have more experience, and cohesion a strong team, our business model is also recognized, network resources are not bad. So, I think this round of financing will certainly be easy to handle.

But I was wrong.

Raising money is never easy. Things are fickle. It has become harder to get funding since 2012. I quickly realized that I had to make some adjustments if I wanted to raise capital for Soomla.

Find the Angel: seize every opportunity

Angel investors are very low-key, even little known.

The reason is simple: In addition to being an angel, they usually have another full-time job (for example, CEOs of other companies or entrepreneurs who sell start-ups). One of my investors doesn't even have information on LinkedIn. In fact, the managers of any big company can be angels, but they don't know it yet.

I found potential investors in unusual situations: job interviews, swimming in a swim, and even sending a daughter to kindergarten. Sometimes, when VCs introduced me to an angel, I found out that I had seen him before, but I didn't know he was an angel investor.

Contact with Angels: Give full respect

After I found the angel investor, I thought the investment fair was the same as usual, but I was wrong again.

I went into the conference room and told him I wanted to get his investment (because he had recently sold his company to ebay and had money on his hands), but I had a cold shoulder. He's rich, and for tax reasons, what's wrong with him if he invests the money more economically?

Persuading private investors is different from persuading VC. Most of the angels you face are very successful, enthusiastic about building an inheritance and willing to help others. But they do not want to be regarded as agents of their own property. It is particularly important to respect the achievements of the Angels when they are in contact with them. Let the Angels feel that they are the driving force behind the business and ask them to help introduce more opportunities.

For example, I see a successful entrepreneur as a potential advisor to Soomla. After he gave me some great advice, I found out he was also an early investor, and eventually he became our first investor.

A speech to the Angels: more refined

It is conceivable that the company's founder in front of the Angel slide show and in front of VC show is very different.

In a speech, I told an angel that I needed 250,000 dollars to build a validation model, and then I planned to finance 10 million dollars through 3 rounds of VC. But this is clearly not a wise move: first, the probability of startups raising 10 million of dollars from VC is 1% to 3%. Second, and more importantly, from an angel's point of view, if we really succeed in the 3 rounds of VC financing, the importance of the angels will undoubtedly be diluted.

The whole business plan needs to be refined in a presentation of angel investors not only with different styles of slides. So we drafted a more concise plan that focused on one thing: Our customers have the will to spend, and we can make ends meet without other investments within 10 months. Our PowerPoint presentation ignores the hype about market expectations and barriers to entry, replacing it with income and profitability. The cases we use are also those that have little financing and fast sales.

The eve of the financing

VCs usually step forward by drafting the terms of the investment agreement (Term Sheet) and making initial investment commitments to entrepreneurs.

In the cooperation with angel investors, the entrepreneur is the one who needs to take the initiative. You need to estimate how much each angel is going to invest in you and how much money he will give you. After multiplying the two, it is the money that you can really get from the angel. Finally, adding up all the potential investors ' money will be the amount of investment you'll eventually get.

Finally, there is an important suggestion that you lose 20%, no matter how likely you are to invest in your initial list of investors.

Don't stop looking for the next investor until the money is accounted for

Financing to this point, I began to discuss the issue with the Angel: who is most likely to become a donor. When an investor wants to be a leader, he will have a deep understanding of the industry so that he can make an investment decision quickly.

In the absence of a leading investor, I tried to end the negotiations with 5 different angels. Each of them has different needs. More importantly, even at this moment, there is the risk of the whole financing short, so I also need to increase the frequency of meeting with the new angel investors, to develop a backup plan to ensure the success of the financing.

In the end, a new angel investor was very interested in what he saw and tried to be the leader of the financing round. Once I had a leader, the ensuing negotiation process was much quicker and the round of financing was soon completed.

In this industry, the importance of angel investors in the investment ecosystem is increasing, I hope that other entrepreneurs can learn from our difficult experience.