You’re an entrepreneur working on a new startup. Your network is not stellar and your connections to capital are weak. You have the next great idea, and need to raise half a million bucks to make it work and then everyone involved will be rich with a capital R. Friends, family, and fools have already been tapped to get you this far.
You’ve gone to the bank for a loan, maybe even tried the SBA. Your company doesn’t meet the guidelines.
You’ve managed to get a few meetings with VCs, but they tell you you’re too early stage or the market is not big enough, or you’re not in their strike zone.
You’ve pitched to the CTEK angels. Crickets.
You’re feeling like you’ll never raise any money at this point. What strategy do you use?
There are a couple of possibilities, assuming you’re in the “never give up” mindset. Your first option, and likely your best, it to bootstrap your company to profitability. While it’s probably all in your mind and is perhaps simply a justification for taking investment, you need to get to the market now, or your “window” will be lost forever. In that case, a second option is to ramp up your networking efforts and go and find an emotional angel.
The problem here is that you know you have a great idea, and it will make lots of money, if only you could get the investors to see the light (at the end of the tunnel, hopefully not the train).
Almost every angel investor has a specific niche that they “get.” Often, they will have come from the same world, or at least one that is very similar. Perhaps they built such a business, or perhaps they got a great investment win from one. In any case, you’re looking for that angel investor who believes in the market you’re trying to address and the solution that you bring to that market. So you’re not looking for “an” emotional angel, you’re looking for “your” emotional angel.
So, how do you find your emotional angel? First, understand who they probably are, who they’re likely to know, and what companies they’ve likely been affiliated with. Perhaps there was a local company that was in a very similar space that did well. Your emotional angel may well have been a founder or executive there. Second, start networking. Get to those people, and ask for advice way, way, way before you ask for money.
Your emotional angel needs to be one who really likes you, your product, and your vision. They’ll be selling you to other angels, and evangelizing you in general. They’ll have to stick their neck out for you, so you had better make them believe.
If you find your emotional angel, you’ll probably find that getting an investment is finally within reach.