Great Angels Need Cheap Seed Rounds

Rinoa's limit, Angel Wing.Angelish Image via Wikipedia

One of the startups that I’m supporting just ran into a classic problem. It’s a great little company: big market, clear proposition, customers with cash, generating revenue, en route to CFBE, etc. They got the attention of a great angel — one who could really help with business expansion, but there’s no deal to be done. The founder pulled in non-web angel money just as he got started — at too high a valuation. The best angels won’t play above a $2M pre-money without extenuating circumstances.

By all means be a complete lunatic about keeping control (which this founder pleasantly did). However, think hard about whether or not you’ll want to do a flattish round a year from founding in order to upgrade your seed investors. It’s more likely than you think.

[NB: @toddsampson and I are going to start using the tag founder independence to start organizing our work on the topic, inclusive of Lifestyle Capital. I’ll tag older posts as I run across them.]

Reblog this post [with Zemanta]
"The angel network is asking chapters to waive their presentation fees for “true startups” — companies that have no revenue and less than $500,000 in capital and are trying to raise less than $500,000 from investors, said Randy Williams, Keiretsu’s founder and CEO. Williams said the change is not a response to the recent attacks on the fees launched by investor Jason Calacanis — who has promised to start his own angel network on Monday, November 16, unless Keiretsu and several other angel groups drop their fees — but have been in the works for several months. Keiretsu also has no plans to drop fees for other entrepreneurs."
—

Sleepy Bulldog at Mahalo HQJasonC’s Dog by cfinke via Flickr

peHUB » Keiretsu Forum To Drop Fees For Early-Stage Startups

Rafer sez:
Gimme a break. Don’t deny that JasonC influenced you about startup pitch fees. ‘We rarely let pre-revenue companies pitch, so we threw the droolin’ loony a bone,’ would have improved your reputation. This silly fable doesn’t achieve that.

Reblog this post [with Zemanta]

  1 of 1 

Based on a theme by Hunson (Designed by Josh) / Powered by Tumblr