How Active Are Angel Investors Outside of Silicon Valley?

It all started last July. We decided we were going to raise a round of financing for our startup, TapHunter (rebranding to Bevato). We kept driving our key metrics (revenue) and in October I hit the road. I want to share a few insights I learned along the way. This post is for all of the founders and entrepreneurs who have thought or said things like:

  • There’s no money or investors in our city
  • We didn’t get accepted to TechStars, so we’ll never raise money
  • We don’t know any rich business people
  • Now’s not a good time of year
  • We’re not 2 hackers from Stanford, nobody will ever fund us
  • Nobody invests in female founders
  • And my all time favorite, people don’t like to fund married founders

There is NO easy path to raising money for your company. It’s hard work and as the CEO you better know your market size, LTV, CAC, growth, burn, how long the money will last, have a proven operating plan and be prepared to show it all. If you don’t know the answers it’s your job to find the answers, raise your hand and ask for help. It’s YOUR job and nobody else’s.

Once you’ve prepared your financials and spent countless hours on making 50 different versions of your investor deck it’s time to build your investor list. There are investors in your city and don’t let anyone tell you differently. There might not be 10+ VC firms chasing your company down with millions, but there’s money in your city and it’s your job to go find it.  It’s time to pound the pavement.

Tip 1: Be prepared for rejection. Keep track of the no’s. Don’t stop until you get 50 no’s. Learn to identify actionable changes within the No’s.

Tip 2: Hope like hell you actually have traction or product market fit. It’s pretty hard to fake it.  What amount of traction is sufficient? Month over month revenue growth is one great sign!

Tip 3: Network like your life depends on it. Here’s a breakdown of how we got connected to some of our investors.

Investor #1 – is a seed stage firm in SF and I got an intro from a trusted portfolio company. We got a yes in 7 days and this helped set the momentum in our hometown, San Diego.

Investor #2 – met him for the first time at an Xconomy event in September 2013. I gave him a 3 minute pitch and we met 3 weeks later for lunch.

Investor #3 – met him because of my participation in Startup SD mentor hours. Investor #2 does deals with investor #3 and that helped solidify confidence.

Investor #4 – he’s the CTO of a local company and I met him a year and a half ago. We kept one another updated on our companies and when it came time I pitched him.

Investor #5 – the president of investor #4′s company. Investor #4 passed him the deal. I had no idea he was making investments.

Investor #6 – met him at Poker 2.0. I checked his Linkedin and saw he was an angel investor and we met for lunch the next week.

Investor #7 – is the CEO of a local company and I met him 4 years ago. This is a personal relationship I’ve groomed over that time. Not only did he invest, but he also introduced me to one of his investors.

I could go on, but the point is these relationships ranged anywhere from a couple of weeks to 4 years. Can you see the themes here? The best way to get a meeting with an investor is to get an introduction from an entrepreneur they trust. I can’t stress this enough. If you’re in a budding startup city where VC’s aren’t standing in line at Starbucks, ask yourself what you can do to bring them to you. I helped organize Startup Mentor hours and share office space with the team who hosts Poker 2.0. I’ll be posting more about other insights I learned along the way. Now get out there and hustle.

5 thoughts on “How Active Are Angel Investors Outside of Silicon Valley?

  1. Hi Melani and Flash! I am so glad that I stumbled across this post tonight. I gobbled up every word and am hell bent on figuring out my market size, LTV, CAC, growth, burn, how long the money will last, my proven operating plan and following in your footsteps to an angel investment for Pura Gioia! Thank you so much for taking time to write this and pave a path for me to follow. Keep up the great work – I am always inspired by you two!!

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