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Five Funding Sources for Startup: Angel
Established Angels, Angel Groups, Entrepreneurs, Retail Investors, Investment Crowdfunding
Customers, of course, play a much more vital role as your company's lifeblood. If an investor sours on you, you're in trouble. If your customers sour on you, you're done.
Self is you. And your role is to build the best product and best company that ever existed. Your investment, in terms of cash, will play its part in getting all of that started, but your time, your energy, and your leadership are the most valuable resources you can contribute.
Friends and Family bring their own issues along with their investment, and those issues will mainly revolve around managing your relationship with them as investors. That said, their existing relationship with you -- as friend or family member -- will, in most cases, come first.
With each of the final two funding sources, their primary role is as your investor. There should and most likely will be added value from these sources, in everything from connections to advice to even office space. However, when the documents are all signed, these investors are expecting a return on their investment.
So let's talk about who they are.
Funding is the most complex part of startup. How, when, and why you get funded is an individual series of choices, and every startup will take a different path. No one strategy is better than another, but you should definitely have a strategy in place before you raise a dime.
Angel investors are individuals who invest in private companies as a part of, or in lieu of, a portfolio of retail investments, like stocks or real estate.
Angel investors are actually kind of hard to pin down, and thus are sometimes the most overlooked source of capital in startup. This is not surprising though, because it's easy to get confused about the definition of an Angel, their role, and how to find them.
If you think of Angels as people with a lot of money and high risk tolerance, you're not too far off. They invest their own money. They can operate independently or as a part of a group. Some specialize in certain sectors or technologies, while others invest in whatever they think is cool. Some take almost no active role with the startup, others will want to be a formal advisor or even a part of the management team. Some make a lot of investments, others might make only one or a few.
So just about anyone with money can be an Angel, right? Well, that's close.
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The Show: Episode 1.1 -- You Can Bleep That Out, Right?
Introducing Teaching Startup: The Show, a different way to bring startup and entrepreneurship to everyone.
On The Show, we talk about startup without droning on about startup. Sure, we talk about startup, in fact, we do that a lot, and you'll definitely learn something. But we also talk about stuff that's far more interesting.
Pop culture? Of course. We don't do our jobs 24/7. Neither should you.
Sports? Yeah, look at us. It's in our DNA.
Parenting? No better way to learn about being an entrepreneur.
Humor? If you're not laughing, we're not doing our job.
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VIDEO: How To Get Noticed
Teaching Startup: The Show - Episode 2.3
Getting noticed in startup is all about building relationships -- with your investors, with your customers, and with your potential investors and customers. Cultivating these relationships is one of the most important jobs for every founder, and it's a shame that a lot of entrepreneurs don't do it right.
WedPics co-founder Justin Miller is an entrepreneur you should try to be like, and not just because Jon Colgan and everyone he's ever met has said so. In this episode, Justin details how he establishes and maintains those relationships, and why they're so important. Getting noticed is about the long game, the slow burn, and there's rarely such a thing as overnight success.
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VIDEO: How To Build Relationships With Investors
Teaching Startup: The Show - Episode 2.4
Just because your startup landed venture capital, that doesn't mean you're successful. And just because you've been offered investment doesn't mean you should take it.
If you and your investors don't have a solid relationship, it could spell the end of your startup. Or maybe just the end of your leadership there.
What starts as a discussion about emulation versus experimentation (and maybe a little man-crush from Colgan), turns into the finer points of authenticity, honesty, and relationships with investors. Investment means the clock is ticking and the runway is getting shorter, every day. Those relationships are going to get real critical, real quick.
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