Psychology of raising angel funds for your startup

Jan Lopusek
TOPMONKS
Published in
4 min readJan 8, 2018

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Raising angel funds for your startup idea could be a difficult task. Couple of failures, bad lucks or setbacks while meeting with investors and you are about to abandon the whole idea. Preparation makes it easier for you to succeed and success gives you a huge kick and important confidence in the early stage of the project. We don’t want to lose another Apple here, so we came up with couple of humble advices to help you navigate in this world.

Central European Angels

Obviously, there is still quite a lot of differences in the Silicon Valley and Europe, particularly in the Central Europe. The local market is bit more conservative. Rumours say, that in Bay area you can get an angel investment during the famous elevator’s pitch. Typically a 10k$ to start. Of course, as an investor you are seeing much more opportunities there to invest into, hence more information buzz makes the investors unable to focus on all the details of your business plan. Plus, the entrepreneurial mindset is way ahead. Successful American people are more courageous and willing to take the risk — or as they like to say, to "take their chance". So they spray and pray, and such pitch could bring your initial funding.

In Czech republic and Slovakia it is quite harder. There is definitely not that advanced network of angel investors and almost impossible to receive funds in the “elevator”. Yet, possible it is. The old regime elite of business owners selling wagons to Russia is still present. Now they want to move into the startups as well, but, don’t even think about reaching out to these “motherlandf*****s.” Luckily we’ve already witnessed several successful companies whose founders conquered the western markets. This young generation of entrepreneurs can definitely support you. Below I am listing at least some of them I’ve heard of, that had taken a stake in the very early venture.

  • Esther Dyson
  • Karel Obluk
  • Eduard Mika
  • Michael Prokop
  • 42Angels
  • Keiretsu Forum
  • TopMonks Studio 😉

There is several other regional angel investors network, such Austrian AAIA, or Berlin’s Point9. I haven’t found any active network in Czech (oSlovakia) republic yet, as the local association seems to be dead and even the 42 Angels were recently passive.

I am aware of newly emerging VC vehicles, that do not fear to invest very early, such Koopeo Ventures, Bohemia Venture Capital or Miton. Even Reflex Capital (who have stake in TopMonks, just for the record) do not fear it as well, yet, before reaching out to any of the guys from the list above, I suggest you to:

“…Come as equal partner”

平等的

To connect all the dots together, let’s take a step back and ask yourself, why do you need funding in the first place?

Do you really need those funds, or do you just wish to have an easier life? The investors don’t want to see you being lazy, or doing well with their money… No, they really don't. They want to be amazed by your hard work and your struggles and achievements so far. So, if you have a corporate job and you are doing well and all you need the funding for is not to lose the comfort zone, not to risk, then you are not ready for the investment. They want to hear about your evenings and weekends working on the idea. They want to hear about your savings; you are willing to risk for this project. They want to see you fully engaged. See your skin in the game…

Have you tried every possible option to bring the project forward? Have you invested, if not equal sum of money you are requesting, then the literally equally worth amount of time into the preparation? You should have done all the validations available -whole research, all the testing, interviews, feedback gathering. Let the investor know about the network you’ve created, the buzz you have started, a tornado you are ready to launch. If you take the expertise from your previous jobs, fine — tell them you are onto something, you’ve spotted a gap in the market after years in the game.

Don’t even come unprepared, hesitating, not knowing what you miss or what your weaknesses are. Study how the startups get funded, how the companies are set up, all the legal, accountancy, marketing issues are ahead. Set up a team if you miss the expertise. Do your hard homework before even drafting a presentation with that hockey stick.

Coming to a meeting prepared like that would give any investor a feeling of an equal partnership. This will put you in a different light. Suddenly you are not begging for the money, but offering a business opportunity, everyone would want to take part in. True pitch masters are capable of subliminally creating the FOMO.

Just to give you a glimpse of questions that we would like to have answered, you can use this list as a non-biding guide to initiate the discussion:

  1. What is the team? How many are you?How you gained the expertise?
  2. What have you achieved so far? Can you deliver results?
  3. What is the project about — segment. How did you find the gap / innovation?
  4. How did you validate it?
  5. What is the competition?
  6. What is the uniquness — how hard it is to copy it by the competition?
  7. What is the target customer / user?
  8. Is it a european or a global project?
  9. Do you have own funds?
  10. What is the first phase and phase after we develop the MVP / product?
  11. Business plan
  12. What phase you are at right now?
  13. How can we help and why should we help?

If you would have any more questions or need some study materials, do not hesitate to contact us.

studio.topmonks.com

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Jan Lopusek
TOPMONKS

TopMonks startup studio | crypto | travel | freedom >>> fan