How NOT to approach funding sources
Somehow I imagine that people running companies are smarter than this, but I cannot tell you how many times I have encountered impolite assholes who want me to give them my money.
Here is a quote from one of the recent ones (with translation):
|"Thank your for your time and consideration. I know that Andrea has reached out and offered to have a call. I just looked at your website and it seems that your role is more around consulting. We are looking for an angel investor/s looking to raise 250K via equity. If this is what you do directly (invest as an angel investor) please let me know. I would like to be considerate of your time gentlemen."||Gimmee Gimmee Gimmee|
|And then later... after I explained "...I am also the chapter president of Keiretsu Forum Pebble Beach, the most active private equity investment group in the world with 3,000+ members in 53 chapters on 4 continents. The Angel to Exit Web site provides free videos and articles that you will find extremely helpful. Angel to Exit also runs live online remote pitch sessions with 20+ representatives from different angel/venture groups in concert with Pitch Global. ..."||F*** you|
|"Thank you FC. I appreciate this. But this isn't what we are looking for. We are not raising millions we don't need exposure to a large pool (its an overkill). We are talking about 250K check with a single angel."||Kiss my *|
Why is this a problem for me?
Reading it independently, I can see how as a startup CEO you might think this was a perfectly reasonable exchange. So I will tell you what I read into it:
But all I want is the money... I don't need your help
Fair enough. But in my experience, people asking for money need help. If you don't need my help, why can't you even make enough on your own to fund your billion dollar company? Can't you find another path to success? Why are you sharing this fantastic opportunity with me if all you need is $250K? Most angel investors can earn that much in 6 months after taxes, so if you are so good at what you do, why can't you earn that much and fund your company in 6 months without me? You do know that it takes (typically at least) 6 months to get $250K from angel investors, don't you? You don't? I thought you said you were brilliant and didn't need any help?
I need help too! To be clear, "no man is an island" (same with women but that's not the actual quote). So when a company tells me they don't need help, I figure they don't know what they are doing. Now I might not be the help they need, but we won't know that until we find out by discussing it.
I will take this moment to also mention the folks who tell me that they have had 3 fantastic exists in the last 10 years and want angel investors to invest $500K. If you made millions several times in the last 10 years, why do you need my money? The answer is almost always that they didn't make all that much, the exits weren't really all that great, and they were perhaps exaggerating as to the quality of those exits? In once recent case the previous exit was a loss to all but the last investors, who broke even.
How to win friends and influence people
If I seem a bit touchy about this, not to worry. I am fine. But the purpose of this article is to help you see it from the perspective of angel investors. It may seem all about ego, and certainly there is a lot of that going around. In the context of the particular email sequence you saw a part of above, no fireworks happened. We just decided that we weren't going to pursue that opportunity. I have 10 companies presenting later this morning who got far further in the process. And I am sure the person who emailed me can find thousands of others to approach for money.
The point of this article is to help you understand how it works and how people misjudge things. I personally misjudge a lot of things, enough to write an article about it every month. I often send emails with minimal information very quickly to keep up with the fast pace. And I often get them and try to be forgiving (as I hope you will forgive me for my trespasses). But if you want to get money from investors, you would probably do better if you were a little bit more thoughtful, considerate, and understood it from our perspective.
That is not to say you have to bow down to our egos. I personally resent ass kissing. I am not that wonderful. And I am not subtle. I just try to do my best and so should you. So somewhere there is a balance between niceness and business savvy. And that is what you should seek to find. You can be smart and skilled and have a great idea and be nice. Find people who you want to work with and who want to work with you, and you will be more successful.
One for the road
Here's another exchange...
Subject: Re: Frank raising $600k. New car subscription for the masses with 20% savings
Eh nevermind. This has been too complicated too early and not the right fit. Thanks anyway. On Thu, Apr 16, 2020 at 8:59 PM fc
wrote: No - sign up using the link, pay the presentation fee of your choosing, and the rest of the process will follow... FC On 4/16/20 5:58 PM, *** wrote: > Thanks. I never received that. Was there an attachment to the email you just sent? > Can you please send me the Zoom invitation? > On Thu, Apr 16, 2020 at 8:52 PM fc wrote: > > Hmmm... you were invited to present on the 6th in response to your submission. > > Here is a copy of an invitation to present. > Choose the 28th zoom session. > > We have joined forces with Pitch Global for our upcoming investor pitch meetings. > > If you are interested in presenting: > > (1) Sign up for the next available session. > The sign-up page has lots of additional details. > (2) We will make an appointment to record the "pitch" between now and then. > > After your 6-minute pitch is recorded, we will provide the details of how to join the meeting. > > If you have any questions, please email me. > > FC > > On 4/16/20 5:40 PM, *** wrote: >> Sorry, I'm confused. I submitted the application and am awaiting next steps, if applicable, and further details. >> I did not receive any notifications after submitting the form. Thanks >> >> On Thu, Apr 16, 2020 at 8:38 PM fc wrote: >> >> Great - I hope to see you when you present... >> >> FC >> >> On 4/16/20 4:38 PM, *** wrote: >>> I submitted the application on 4/6. Thanks >>> >>> >>> On Thu, Apr 16, 2020 at 5:56 PM fc wrote: >>> >>> Go to http://a2e.co/ if you are interested in presenting for possible investment. >>> >>> >>> We have joined forces with Pitch Global for our upcoming investor pitch meetings. >>> >>> If you are interested in presenting: >>> >>> (1) Sign up for the next available session. >>> The sign-up page has lots of additional details. >>> (2) We will make an appointment to record the "pitch" between now and then. >>> >>> After your 6-minute pitch is recorded, we will provide the details of how to join the meeting. >>> >>> If you have any questions, please email me. >>> >>> FC >>> >>> On 4/16/20 1:42 PM, *** wrote: >>>> Would you like to connect next week to learn more about the business, team and operating plan? >>>> We're starting to receive the first $150k from angels next week. >>>> Minimum investment size is $25,000 via a SAFE with 25% discount and $5 million cap. >>>> >>>> -*** >>>> >>>> >>>> >>>> On Tue, Apr 7, 2020 at 9:35 AM Mailtrack Reminder wrote: >>>> >>>> ⚠️ Your email to firstname.lastname@example.org has not been opened yet. Snooze for 24H or 48H (disable) >>>> >>> >>> -- >>> - If you don't want our emails any more, reply and say so- >>> -This is confidential to the parties I intend it to serve- >>> Fred Cohen - 831-200-4006 - AngelToExit.Com >>>
Note to startups. If this is too complicated, (Go to the sign up page, sign up, make an appointment) you should not try asking for "$25,000 via a SAFE with 25% discount and $5 million cap". Because guaranteed this is the simplest thing you will be involved in for getting that funding or executing on whatever plan you have.
Note to other angels (If there are any). Don't send these folks $150K if this is in fact too complicated for them. And if it is not too complicated for them, question whether they are able to tell the truth.
Note to mailtrack.io. Your solution doesn't work. I responded to the email far earlier.
Note to customers of mailtrack.io. See the note above.
A call to action
So now that you know how to be nicer, I am going to try to help you!
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Be nice and I will try to be nice to you as well...
Don't be an asshole.
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