12 minutes ago • Edited • Visible to anyone on or off LinkedIn
How do you raise money to start your company?
I can bet you’ve heard the world angels investors. It has become fashionable to write angel investor in our LinkedIn profiles.
Who are these angels?
Angels (Angel Investors) are wealthy individuals who invest in early-stage startups. Angels understand technology and market trends and invest small amounts in smart founders to help them start their startup journey.
These investments are risky because most startups fail. Even the smartest and most experienced angels lose money more than 50% of times.
Why do Angels invest in such risky ventures over public equities?
Because the upside is immense. The best investments can fetch 20-30x returns. This chance of a hitting a jackpot motivates angel investors.
However, a 30x return is not the only reason.
Many angels are tech enthusiasts. They love talking to founders and helping them build amazing companies. They are problem solvers. They want to have fun while investing.
VCs are fund managers that deploy capital of others. They invest OPM (Other People’s Money). They are not necessarily tech enthusiasts.
Their goal is to make a lot of money for them investors and themselves. They also invest after Angels once the founder has built some product.
If you’re a first-time founder starting your journey, you’ll struggle to raise money from VCs. Angels are a good bet for you.
However, there is one category of investors you should approach even before Angels.
F&F: Friends and Family
The people who have known your for a long time are most likely to back you. Never ignore the power of your network. That’s your superpower. Don’t hesitate asking people you know.
Our CEO did a fundraising workshop with Kerala Startup Mission in Trivandrum with dozens of founders.
