We’ve been helping startups raise money around the world since 2004. Over 900,000 entrepreneurs have used our site. And the question we get asked most is ‘How can I get my idea to investment?‘.
After all this time in the industry, you’d think we’d be well-placed to answer it. And we are. But it’s still not an easy question and the answer depends on the business in question.
We’ve been holding events and workshops to help entrepreneurs navigate this difficult first hurdle. Back in March we did a big one with global digital skills educator, General Assembly. And we filmed the whole event so we could share the wisdom with as many people as possible…
The film is quite long and you may want to watch specific sections at a time, so here’s a breakdown:
0:00–17:06 Entrepreneur & Investor Olivia Sibony describes her experiences from the Grub Club idea to finding investors
35:26-END Ed Stephens interviews an expert panel of entrepreneurs on their experiences: Anthony Rose (Seedlegals, BBC iPlayer), Elizabeth Swanton (Feedr) and Wil Harris (Entale, Condé Nast)
Enjoy!
If you have any questions, please reach out to hello@angelinvestmentnetwork.co.uk
Back in 2013, I took a step that would change the trajectory of my career forever. After seven years at Goldman Sachs, I left for a new adventure. I was confident in my skill set, but terrified that I was abandoning the safety net of the corporate career path.
Fast forward six years, and how glad I am that I took that decision. I launched a foodtech startup called GrubClub, which I ran for five challenging but satisfying years, before EatWith acquired us in 2017.
A celebratory Grub Club evening
One of the things I learned on that journey was how hard and how
important it is to raise funding. That’s partly why I joined Angel Investment
Network last year. I had raised money through them for GrubClub and really
bought into their mission to democratise angel investment.
So, here are my five key tips for getting investment:
1. Investors invest in teams
Many of the most successful businesses are at their core very
simple ideas. Google allows people
to search for stuff on the internet. Ford builds cars. But neither Google nor
Ford were the first in their category.
Their success is commensurate to
their ability to execute changes.
That’s why the team in charge of navigating this journey is so important. And that’s why investors invest in teams. So, keep that at the forefront of your mind both when building out the early team (obviously), but also when creating a story for your pitch.
Have you got an A team?
2. Remember that investors are not the same as customers
(This point is related to #3 below but is important enough
to mention on its own.) Entrepreneurs often fail to communicate successfully
with investors because they explain the benefits of their product/service as if
describing them to a potential customer.
This is easy to do because during product and strategy
meetings their focus has no doubt been on crafting the proposition to
customers.
While your investors may also be customers, your proposition to them should not be the same. You will lose their interest if you talk to them as if they were customers. So, craft a story and a proposition specific to them…
3. Tell investors a compelling story
I hear a lot of people give advice like ‘tell a story in your
pitch’. But they often fail to explain how to do that meaningfully. So, how do
you tell a compelling story to prospective investors?
The most basic story that all investors want to hear is how they
are going to make money. There may be other factors like the desire to make a
positive impact on the world. But ultimately, an investor wants to make a
return.
I heard a founder sum up this idea nicely on The Startup Microdose
Podcast – he said, “Show investors what winning looks like.”
So, build the story of your pitch by putting dollar signs in the eyes of investors and by explaining to them how you are well-placed to execute on this grand vision.
Is your investor story compelling?
4. Create momentum
Investors are busy people. You will not always be top of
their priority list. So, don’t be disheartened if they don’t get back to your
message straight away.
But also, don’t be shy of sending them reminder messages.
The trick to doing this and engaging them is to try to include some impressive update that you’ve achieved since your previous message to them e.g. ‘Ex-CEO of Unilever has just agree to join the board’ or ‘1,500 new users sign ups in the last week’.
This creates the impression of progress and always helps to prove the competence of you and your team.
5. Don’t waste time
We live in a digital world. A world full of tools to boost your productivity and streamline your processes. Use them! There are some great ones for raising investment. My favourites are: Seedlegals – for digitally creating and signing all your legal documents; MixMax – for seeing if people have read your email and how many times and when; and, of course, Angel Investment Network – for meeting investors you could never otherwise hope to meet.
What do you think?
These tips are both from my own experiences. Do you agree/disagree
or need more explanation? (Let me know in the comments!)
Author BIO
Olivia Sibony is an award-winning entrepreneur and ethical investment champion. She left a career at Goldman Sachs to launch foodtech startup, GrubClub, which she sold to Eatwith in 2017. She then joined Angel Investment Network (having previously raised money through them) to launch and grow SeedTribe, a spinoff platform focused on impact entrepreneurship.
She
is also a Board member of UCL’s Fast Forward 2030, which
aims to inspire the next generation of entrepreneurs to launch businesses that
address the UN’s Sustainable Development Goals (SDGs).
London-based bakery, Orée, has raised £425,000 through Angel Investment Network (AIN) the UK’s largest online platform connecting angel investors with startup businesses.
The French-style, high-end bakery started trading in March 2016 and currently has two shops at 275/277 Fulham Road and 147 Kensington High Street. The concept is bringing ‘a taste of the boulangeries and patisseries of rural France to London’. The funding will finance the opening of the next shop based in Covent Garden with a further location in London Bridge set for later in the year. The ambition is for more than a dozen shops across London and an international expansion.
The raise is one of the largest for a food business in AIN’s 14-year history. The highest to date was the £600k raise for Rosa’s Thai Cafe which raised £500k through AIN in 2014 and has since delivered returns to investors via a private equity buyout.
The combination of Orée’s high-quality product offering and high-end, high footfall locations across London, gives it a strong position within the food retail industry and made it an attractive proposition for AIN’s network of investors. Orée bridges the £8bn bakery market and the £6bn café and coffee shop market, both experiencing annual growth of 2.5% and 5.7% respectively. According to data from AIN, food and beverage was the second most popular category among angel investors in the UK for 2018, losing out only to software.
Xavier Ballester, Director at Angel Investment Network who brokered the deal, said: “Orée was of strong interest to our investors with its offering of a premium, authentic French Patisserie to a market that is increasingly captivated by continental cuisine. It satisfies several consumer trends that have characterised the UK casual dining market in the past couple of years, including ‘premiumisation’ and a concern for provenance.”
This interview with Mike Lebus, founder and managing director of Angel Investment Network, was originally published in Sifted. You can read the full article on ‘How to Make a Smart Angel Investment’ with views from other industry leaders here.
Mike Lebus, angel investor & co-founder Angel Investment Network
Mike Lebus (UK)
Mike Lebus is co-founder Angel Investment Network, a platform catering to 205,000+ angels which has backed the likes of bed mattress startup Simba, geocoding business What3Words and kids media company SuperAwesome.
An angel investor for 6 years.
Number of personal investments: I try to make two personal investments a year. Through the venture division of the company (me and three others), we have a stake in over a hundred companies.
Average cheque size: I normally invest £10-25k.
The biggest misconception about angel investing is… that investors should be based in startup hubs like Silicon Valley and London. Online platforms and digital networks now allow investors to find great deal flow wherever they are based.
Do… take the time to meet and get to the know the founding team. When you invest in early stage projects the idea takes second place to the team. This is because the idea will have to change and evolve to be a success; and it’s the team who are responsible for doing that!
“Investors don’t have to be based in startup hubs like Silicon Valley and London.”
Don’t… invest in only one company. No matter how good the opportunity looks, there are so many unknowns when it comes to early stage investment. It’s a much better strategy to invest smaller in more businesses.
The biggest mistake I made was… to miss out on a great opportunity because I failed to build a good relationship with the team. In the early discussions I should have focused on getting to know them, their vision and their processes; instead, I was too blinkered on the valuation and deal terms. It ended up being a waste of everyone’s time. The company went on to do very well!
My personal top tip is to… manage your expectations. If you’re obsessed with returns and timescales, you’ll end up being a burden on your portfolio companies. If you relax and trust the team to execute on their vision, then you can focus on finding meaningful ways to help them with your experience and connections.
My most recent investment was in… Sweatcoin, an app that tracks your outdoor steps and rewards you with digital currency. It’s been the fastest growing health and fitness app in history in every country it’s launched in on the App Store. I know the founder well, so knew how talented he was. I also loved the company’s innovative approach to incentivising people to become more active and get healthier.
Sweatcoin tracks & verifies your outdoor steps using your phone’s accelerometers and GPS location. Those steps get converted into our currency — Sweatcoins.
The deal I regret missing out on is… Funding Circle. We helped them with funding very early on, but I chose not to invest personally. Their IPO last year valued them at £1.5 billion!
If I could change one thing about the European angel scene it would be…More government incentives to encourage more people to invest into startups. The UK have the SEIS and EIS schemes, which have really helped stimulate early-stage investment. I think more European countries should introduce similar incentives.
