It was 9am when I landed in New York City for my 153rd angel investor meeting. After eating breakfast at Pret a Manger and a 2-hour angel investor meeting I had been convinced that there are 5 essential rules when raising angel funds.
Know your Product
Your product isn’t just the features and benefits, it is the vision you have in mind for the company. If investors question why you don’t partition off your modules when they are superior to what’s on the market, stick to your guns. Don’t change your approach in the middle of a meeting.
Research the Investor
Reading the investor’s blog, LinkedIn, or bio online will help you gain a better understanding of their preferences. Knowing the investor’s hobbies, past experiences, and viewpoints could make or break the meeting. Find affinity with the investor and know what he can offer besides money.
Stop your Pitching! Just Prototype
The 20-minute PowerPoint pitch is dead. Show a working prototype. A proof of concept is key to convincing the investor of your vision.
Show some Swoosh!
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Create a Founder Friendly Deal
When making “the ask,” make sure to feel out the investor. If the investor asks for anti-dilution, first priority liquidation rights, and 8% dividends, RUN. Here is a founder friendly term sheet I use when raising money: Founder Friendly Term Sheet