Lessons Learned while Raising Angel Investment(kartme.com)
kartme.com
Lessons Learned while Raising Angel Investment
http://www.kartme.com/blog/raising-angel-funds-nyc-5-lessons-learned-part-1-2
3 comments
Good to we you agree with the points about how angel investors are busy and like to ride on momentum.
I also agree with you that a bright, shiny object is very important. For web products, it's a requirement to get past the first meeting. See my earlier post: Pitching without PowerPoint: 8 Tips for a First Meeting at http://www.kartme.com/node/31475
I'll qualify my statement on metrics by saying that, if your target angel investors aren't in your target customer segment, then you'll need metrics around usage to convince them of (a) the value of your bright shiny object to your target customers and (b) your ability to make it shine brighter. And I agree it's not about goals and plans. It's metrics about your past achievements and lessons learned.
I also agree with you that a bright, shiny object is very important. For web products, it's a requirement to get past the first meeting. See my earlier post: Pitching without PowerPoint: 8 Tips for a First Meeting at http://www.kartme.com/node/31475
I'll qualify my statement on metrics by saying that, if your target angel investors aren't in your target customer segment, then you'll need metrics around usage to convince them of (a) the value of your bright shiny object to your target customers and (b) your ability to make it shine brighter. And I agree it's not about goals and plans. It's metrics about your past achievements and lessons learned.
Cool, thanks for the followup. I guess I could have phrased it better myself.
My experience was, after investment, we brought in (as cofounders) a really experienced team of marketing professionals (one from a big name, like Oglivy, and another who ran online marketing for a major bank). We had business metrics, we measured progress of focus groups, interviews, surveys, etc. The kind of metrics corporations use to "save money by making cheap mistakes on paper during planning instead of making expensive mistakes in production".
If I had to do it all over again I would have just built the wrong thing, and delayed the cost of finding the product/market fit until I raised more money with that wrong thing. Because metrics against a bright and shiny object, even the wrong object, are perceived as more valuable than metrics that bring you closer to building the right object in the first place.
My experience was, after investment, we brought in (as cofounders) a really experienced team of marketing professionals (one from a big name, like Oglivy, and another who ran online marketing for a major bank). We had business metrics, we measured progress of focus groups, interviews, surveys, etc. The kind of metrics corporations use to "save money by making cheap mistakes on paper during planning instead of making expensive mistakes in production".
If I had to do it all over again I would have just built the wrong thing, and delayed the cost of finding the product/market fit until I raised more money with that wrong thing. Because metrics against a bright and shiny object, even the wrong object, are perceived as more valuable than metrics that bring you closer to building the right object in the first place.
i whole heartedly agree with your statement that "metrics against a bright and shiny object, even the wrong object, are perceived as more valuable than metrics that bring you closer to building the right object".
That was my experience with showing people "designs" that were moving us in the right direction. I got 0 credit for that. I had to show the designs live (i.e., shiny) and with user traffic data (i.e., metrics) as proof.
That was my experience with showing people "designs" that were moving us in the right direction. I got 0 credit for that. I had to show the designs live (i.e., shiny) and with user traffic data (i.e., metrics) as proof.
Nice article Phil. Keep up the good work!
#5 is a big one. A lot of the people I talk to who are raising or have raised money say that you need one investor to take the first dip. No one really wants to be the first guy in. But once you capture that first, the rest fall like domino's and can't wait to join the party. If one reputable investor likes you it's often enough to say there's something here, I don't want to miss out.
#5 is a big one. A lot of the people I talk to who are raising or have raised money say that you need one investor to take the first dip. No one really wants to be the first guy in. But once you capture that first, the rest fall like domino's and can't wait to join the party. If one reputable investor likes you it's often enough to say there's something here, I don't want to miss out.
I disagree with his point about various collectives overall increasing the sophistication of angel investors, because the existence of organizations like YC are likely to draw in newer, less experienced angel investors.
When you democratize a process and make it easier, you'll get some more sophisticated folks using it, and a lot of new people using it who otherwise wouldn't.
When you democratize a process and make it easier, you'll get some more sophisticated folks using it, and a lot of new people using it who otherwise wouldn't.
He's dead on about the momentum. I had 4 angels lingering around, and it wasn't until I was like "ok, everyone else is investing, act now or you'll miss your chance" that I got 2 of them to close.
And for seeing measurable goals... they don't care at all about business metrics, they see your progress as being measured by bright and shiny objects. Just crank out code and get users, don't dither on marketing plans or building competencies because that's not something they see as valuable, nor as progress.
Hope that my testimonial adds something to the reading experience of the article. :-)