Angel Investing, Entrepreneurship & Learning

I’ve been meaning to blog about this for some time. 2 weeks ago, I attended a seminar (hosted by UTC) on “What a founder has to do to remain the CEO after raising money.” Scott Frazier, one of the most successful angel investors in the state of Utah, provided an incredibly insightful presentation. The highlights are below.

5 Tips to Raising Money

1. Give your best pitch in the first 30 seconds: The investors should know what you do and how you make money in the first 30 seconds! This is a huge problem with most pitches. Many times, the entrepreneur will get 10-20 minutes into a presentation and the investor still doesn’t understand the company or value proposition — big mistake!
2. Bring a customer when presenting: There is no one better to pitch your product than your customers.
3. Offer a personal benefit: This may seem very small, but investors love when the pitch effects them personally in a positive way. If you have a product — give it to the investors for free. Scott told about a company who turned off his angel group because they wouldn’t give the investors a free pair of sunglasses. He also told about a company that offered a free annual membership to their website for listening to the pitch and a free lifetime membership to the site for making an investment. They loved it!
4. Raise capital when capital is available: Scott was offering strategic advice to entrepreneurs on the timing of the fund raising efforts. He suggested that entrepreneurs start early so they are not desperate when pitching. He also suggested that you study out various angels & VCs to know their financial picture. For example, right now in the state of Utah… most of the VCs are in the process of raising funds so it is a bad time to approach them. As soon as they close their funds would probably be the best time to approach them.
5. Find investors with deep pockets: (yes… this seems like a no-brainer. Doesn’t every investor have deep pockets?!). The reality is that you want to work with someone that has the capability of making multiple investments in your company if needed. It’s wise to talk to your investors up front to find our their feelings on follow-on rounds before taking their money.

Scott also gave some tips on how to get the most out of your company upon exit. I’ll have to include that in a future post.