Are You Ready To Talk To Angel Investors?
By Kevin Vela
I get a lot of requests from prospective clients who either a) want to know where they can go to look for money, or b) ask me to connect them to angel investors.
My first response is always “how much have you put in?” I remember reading a VC guy’s blog a few years ago who said that if you can’t come up with $100k on your own, then you’re not resourceful enough for me to invest in.
$100k may be a little steep, but based on my interaction with angel investors around town, the message rings true. There are a number of financing sources out there – parents, family, friends, banks, credit cards, etc., all of which should be exhausted before looking for angels. If you’re not ready to invest your own money, or those of your closest friends and family, why would anyone else be ready to invest their money in you?
Most angel investors have full-time jobs outside of angel investing, so their time is extremely valuable. If you walk in and are not prepared to talk about your personal commitment to the idea or company, you’re doubling up on your time-wasting.
I know that a lot of my clients who are angel investors are much more interested in a young guy with an average idea, but who is so passionate about his idea that he’s leveraged to the hilt in credit card debt* and can’t possibly get anymore cash on his own, so now he’s seeking angel funding, than an entrepreneur with a brilliant idea but who is not willing to risk his own money or quality of life.
Remember, when an investor invests in a startup, he or she is investing in you, not the idea. If you can show potential investors that you’ve already maxed out your personal investment in yourself, then you’ll be much more likely to convince someone else to do so.
*Note, I’m not advocating credit card debt. But I would like to encourage entrepreneurs to explore all personal channels before seeking angel funding. Please consult with your attorney and advisers before doing anything rash.