The problem isn’t local investors, it’s you.
Investor pitches, particularly outside Silicon Valley and NYC, generally fall into two buckets: the founder either asks for too little cash or aims too low.
When founders ask for too little cash, usually in the realm of <$250K, alarm bells start ringing for most investors. We worry that you have no idea what you’re talking about, how much it costs to build a business or worse. If we give you too little money to hit a significant milestone, the likelihood of you hitting that milestone (or even surviving for 12–18 months) is small. That’s bad for everyone at the table.
When founders aim too low, it’s often even worse. This is when you get called a lifestyle company, regardless of whether it’s true, and the investor stops paying attention. It sucks, but it happens. As Charlie O’Donnell says,
Venture investing is hard. You’re going off of very little in the way of predictive data — so if you’re not telling a big story, it’s hard for us to imagine one if we don’t hear it from you first.
Look, I get it though. Outside the big hubs, the local tech community will often tell founders to lower their ask to align with the local investor’s checkbooks. That advice is well-meaning, but terrible — ignore it. The problem isn’t the local investors, it’s you. No one’s a gatekeeper anymore.
Get on AngelList, look for other companies in your industry and align your ask with the average seed round. If you can’t find the money locally, go elsewhere.
Understand that learning how to pitch a business is just as important as building the business itself.
Originally published at Results Junkies.