

Lessons Learned while Raising Angel Investment - phil_KartMe
http://www.kartme.com/blog/raising-angel-funds-nyc-5-lessons-learned-part-1-2

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barnaby
I learned a lot of similar lessons. I like his point about how they're too
busy because investing isn't their primary focus. I actually found this
infuriating at first because they promised to be really helpful, but because
they were so hard to reach they actually became really expensive.

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. :-)

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phil_KartMe
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.

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barnaby
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.

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phil_KartMe
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.

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agotterer
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.

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angelbob
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.

