The goal with a potential angel investor is to get the next meeting
Unfortunately, more often than not, startup fundraising can be a lengthy process. My good friend, Eric Dobson of the Angel Capital Group, has mentioned to me on several occasions that too many of the startups he meets with expect the courtship process between an angel investor and startup to be quick. It just isn’t.
In fact, in my time being involved in over half a billion dollars in deals, I can tell you that on average a startup should anticipate a 3-9 month process when raising funding from an angel investor.
The process isn’t what it might appear to be like on reality TV shows
Notice that I used the word courtship above. Because that is exactly what the process is when an angel investor is considering an investment in a startup.
That process often includes numerous phone and in-person meetings. Followed by a period of due diligence, wherein the startup is providing documentation to the angel investor that can substantiate the claims they have made.
For example, if your startup has claimed to have patents (either provisional or issued) you will undoubtedly have to prove that in writing. The same thing goes for revenue numbers, purchase orders and more.
Because most startup founders want to speed up the process, they tend to forget the real goal of meeting with a potential investor in the first place.
So, what is that goal?
The goal is to get to the next step in the process. Whatever that may be. Each step should be seen as a stepping stone to get to the next step, which is hopefully a signed investment agreement.
Now, is a one and done deal possibly. It is. In fact, I once coached a startup through planning out their very first investor meeting and they were able to secure funding during the very first meeting with an investor. Just remember, that sort of result is extremely rare and in some cases should cause red flags for the startup.
What other goals can you see having when meeting with a potential investor? Have you ever secured funding, or know a startup that has, during their first investor meeting? If so, I’d love to hear about it.