Unless you are independently wealthy or have a line of investors at your door, you’re going to need capital to get your startup going. If you want to steer clear of traditional loans, crowdfunding is an option worth exploring. Crowdfunding is a way of raising money for a project through donations or investments from the public. In the case of startups, crowdfunding can be used to launch or grow a small business.
Gal Josefsberg is the VP of Product Development at SocialChorus and instructor at GA in San Francisco. In this blog, Gal describes the changes in fundraising needs throughout the years and how you can get your startup off the ground without VC buy-in.
Back In My Day…
I started my career in 1997. Back then, the internet boom was just starting out and companies were launching into insane valuations over night. It seemed like everyone was putting together a new site and then going IPO for hundreds of millions of dollars. Of course, we all know how that ended. The bubble burst and websites like eToys, pets.com and others lost their insane valuations just as fast as they earned them. However, what few people remember about that age is that simple sites (and they were very simple back then) like eToys and pets.com needed millions of dollars to get off the ground.
Are you using AngelList to its full potential? Ash Fontana, Head of Fundraising at AngelList, recently stopped by GA to share best practices for connecting with investors on the site. Some of the key takeaways are listed below. For more details and examples of best practices, watch Ash’s talk here.
1. Build a Good Profile
Fill in as much information as you can. AngelList was designed to eliminate any possible mistakes being made on your end; like presenting information illegally or making it difficult for investors to digest your profile. There are convenient tips listed in each field you need to fill out — read them all. Lastly, don’t use fluffy language. Stick to the facts and state your credentials clearly.
Meet Miki Agrawal, serial social entrepreneur, author, and friend of General Assembly. Miki has launched a number of companies, from an organic farm-to-table pizzeria in NYC to an underwear brand for women in the developing world. Miki also recently wrote the book Do Cool Sh*t, a guide to starting a business and living a more entrepreneurial life. We’re happy to have her share some thoughts and advice on non-traditional fundraising here on the GA blog.
– Matthew O. Brimer, Co-Founder, General Assembly
I’ve been thinking a lot about the concept of raising money. I found out recently that a few people I know are having a real hard time getting funds for their passion projects and I’ve been thinking critically about the psychology behind this process.
Over the years, my twin sister Radha and I managed to raise over 4 million dollars for our various passion projects — SLICE NY (now WILD), Super Sprowtz, WILD Las Vegas, THINX — and we have a much clearer understanding of the emotional process of raising money that just about anyone could apply.
Identifying the Problem
I remember when I first started going around and “setting up investor meetings”, I was nervous, I fidgeted a lot, I forgot some key points, didn’t have all of the answers on the spot and I just wasn’t myself.
After many failed attempts at one-on-one meetings in every setting possible (coffee shop, conference room, their office, my office, etc.), I took some time to evaluate my methodology.
I realized that the biggest, most glaring problem in all of these instances was simply that I wasn’t myself at all.
The sparkle and fire that I usually have when I am with my close friends just disappeared in these meetings. The way I talked with confidence about my business idea with my friends was replaced with cracking voice and jumbled thoughts.
Why was this happening??