Raising Funds For Start-Ups

He launched the firm as the Texas Entrepreneur Networks in 2009. Today, TEN Capital has over 15,000 investors in its network and has helped startups raise over $900M.

Who Are Angel Investors?

We’ll get to that in a bit, but for now, let’s talk about the common mistakes angel investors make.

Common Mistakes Made By Angel Investors

  • Spending too much time focusing on current market or products — This is one of the top mistakes that investors make — markets change; products come and go. The team is what will really carry it all the way through, that’s what you should focus on. Yes! You want to look at the products, check out the competition, hang out with your team, and see what they are doing right and wrong.
  • Looking at the latest hot thing — Yes! That new product looks promising, but you don’t want to put all your focus on it. You can check it out, but you shouldn’t put all your energy on that one product — you’re obviously missing something. Remember that the product won’t be hot forever.

How To Attract Angel Investors

  • Using product and market validation as a criterion — When you start putting systems in place to prove and show you can have some repeatability and predictability around your startup, it attracts angel investors because it shows structure within the business. To achieve a better business structure, you need to test your model. You have to show investors it’s a profit-making model and can grow even bigger!
  • As a startup, what you want to find is “what does the model really look like?” Testing is key. It shows you’ve figured out the lowest cost channels and how far those channels can go before moving to the higher ones. That’s always very impressive to investors.
  • Make sure you give a name to everything you have — every product, technology, platform, and data set should have a name. If you don’t have a brand name, investors can’t give you credit for it — they don’t know or realize it’s there. You can also add an AI algorithm on top of it to make it more attractive!
  • Everything is going online — you have to look at how everything will be connected or represented online.
  • You need documentation, a pitch deck, diligence box, 3–5yrs financial projection, and key documents in the box — All these can only be achieved when you work with experts that help put these things in place. They help make your deck look good, more professional, and fill in the missing pieces. They also help maintain the structure of the business. They see the market every day, so they are the best to give a read. They can coach you on how to break the steps and the actual market valuation. Always remember that valuation is not a formula; it’s a negotiation. Approach it that way.

Are You An Aspiring Angel Investor? Here’s A Little Tip On How To Learn

  • The investment methodology, the timesheet, and terminology; pre-money, and post-money can be very new and different. The great way to learn is with other people — You need to be around other investors, watch how they do their thing, share the deal flow and diligence that goes with it.
  • Different people bring different skills and strings to the table as well — that could be very helpful
  • Podcast — A podcast is usually a useful resource! Listening to someone tell the story straight up is also a good way to learn about this investment niche.
  • Do not find a product and want it on day one — It’s going to take you a lifetime to get to the full vision. You have to go into the market with what you can deliver. Then you can start building your visions from there.
  • Understand the rule of software development — It takes 6 months to build and 6 months to sell. If you can’t build it in 6month, you’re scoping it too broad; and if you can’t sell in 6 months, you built the wrong thing.

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Corey Kupfer is an expert strategist, negotiator and dealmaker with 30+ years of experience. He is also the creator and host of the DealQuest Podcast.

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Corey Kupfer

Corey Kupfer

Corey Kupfer is an expert strategist, negotiator and dealmaker with 30+ years of experience. He is also the creator and host of the DealQuest Podcast.

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