One common misconception about fundraising is that you must know an investor before you can approach for funding.
It’s best to have some validation from your own group before approaching those outside of your core. Start with your current network and work out from there.
Identify the right type of investor for your deal based on risk and return. Angels wants three to five times their investment. Venture Capital wants 10x their investment. Family Offices want five times their investment but are often more patient for the return.
Choose the right investor for your raise and then find those investors and initiate a conversation. Later follow up and build a relationship.
Another misconception is that once an investor has said ‘yes’, then it’s a ‘done deal.’
In most cases this is not so. The ‘yes’ marks the start of the diligence phase which in most cases lasts 4 to 8 weeks.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.
Let’s go startup something today!
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NOTE: Investor Connect is a program under the Texas Open Angel Network which is a 501(c3) non-profit dedicated to the education around startup funding. Hall Martin is the principal contact, and may be reached at http://www.investorconnect.org/contact.
Hall T. Martin is the Director of Investor Connect which is 501c3 non-profit dedicated to the education of investors for early stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon as a basis for investment decisions.