Power Points: Fundraising Timeline

Every month, through my company I'm fortunate to work with a few companies that are going to present at the Band of Angels in addition to other clients I work with.  There are lots of differences between angels and vc's one of the most notable is that in 30 days, the company can be certain that they will move at least to the second row in the mind of the investors because a new set of companies will be coming through.

As such, I advise start-up executive teams to set a goal to get an answer within 30 days of their presentation.  It's a lot easier to get a decision from an angel for a variety of reasons including but not limited to:

1. It's the nature of being an angel investor.  They provide quicker access to money because their due diligence is not as thorough as a larger investor.
2. The size of their investments tend to be such that they like to have a number of investments in a different companies and are always looking for a potential new one.
3. I've found that angel investors are far more direct in terms of their intention to invest.  Even if they are not, if they are maybe after having seen a presentation and a follow up due diligence meeting, more often than not they are a no.

I realize as a consultant helping out these entrepreneurs it's easy for me to focus on the "yes/no" as a goal because a no is a bummer.  But for me, nothing is more of a bummer than the seemingly never ending vortex of the maybe from an investor.

A few keys to focus on if you are financing your company:

1. Let the investors tell you what their key issues are.  I think it's very effective to let them give you the 3 issues of importance to them.  When you've addressed them to their satisfaction it's a lot easier to ask for a decision.
2. If they go beyond #1, they are more likely than not a no.  They are looking for a reason not to invest and wasting both of your time.
3. Find the one or two thought leaders of the angel investor group and convince them, they'll convince everyone else.  Angel investors tend to watch each other's backs.  Find the leader among them and focus on convincing them, they'll help you out from there.

The 30 day timeline is a suggested one and can be adjusted based somewhat on your situation.  The most important thing is your mindset:  close!  Otherwise you will quickly find that you are spending 75% of your time ineffectively fundraising for a company whose performance is suffering because of you're distracted.

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