Seed/Angel Funding
Don't assume a socially conscious angel will be a soft touch. To win their money, you've got to get a lot of things right.
Angel investors bridge the gap between the money you have and the money you need to grow your business. Angels provided $8.9 billion for 26,300 entrepreneurs in the first half of 2011, according to the Center for Venture Research. That’s a nice pot of money, and by all indications, it’s even larger now.
Still, getting your share of it into your social enterprise is no small feat. Most pitches to angels fail.
The Angel
CoFund last week announced
the completion of its first five investments, with a total of £7.2 million
committed to UK SMEs.
One of the five businesses is female founded.
Business and Enterprise Minister Mark Prisk joined some of the first businesses to receive funding, following the end of a strong first quarter for the Angel CoFund, which was launched in November 2011.
I have the good fortune of living in Boulder, CO home of TechStars. For those not
familiar with it, Techstars is the largest US accelerator focusing on
technology companies. They fund an average of 50 companies per year. Each selected company receives $100K of seed money in exchange of equity.
The TechStars model has been replicated in several other cities in the U.S. In addition, they just launched a Global Accelerator Network.
How easy is it to get in with TechStars? Well, 1% of the applicants are funded. The accelerator receives an average of 4,000 applications per year. The good news is that TechStars co-founder David Cohen has recently set up a $28M fund. 50% of this capital will be devoted to fund companies that go through the TechStars program.
For
some entrepreneurial ventures, startup capital needs are minimal. If an
entrepreneur has a low risk profile (and an idea that doesn’t require a
lot of startup capital), this could be the way to go.
For other ventures, startup capital requirements are more involved. While there are entrepreneurs who are able to finance their startups themselves - either from savings and investments or by continuing to work at least part time - most of us need to investigate other sources of financing.
In addition to all the standard options that entrepreneurs have relied on for decades - loans, credit card financing, money from family and friends - here are some other ways that you can secure the funds you need:
As the fabulous The NextWomen DWEN Interview Series draws near its close, we'll be bringing you some of our favourite gems of wisdom from the series, focusing on certain key subjects. This week's hot topic is: raising capital.
The Next Women is organizing it's next Pitch Event on February 24, 2012 in Amsterdam in the beautiful Elicium (photo).The pitch events are designed to improve access to financial and professional networks for women entrepreneurs and to enhance and accelerate a faster growth of their business.Therefore, The Dutch Ministry of Economic Affairs, Agriculture and Innovation supports this upcoming pitch event, because female entrepreneurs are a potential for growth.
It’s been a great 12 months for Lisa Falzone. Last year she
raised $3.7 million in her series "A" funding round; then last month at the Macworld
– iWorld event, her company Revel
Systems was officially announced as the winner of the Best iPad Business App of the Year Award.
A new report by the Organization for Economic Cooperation and
Development (OECD) looks at how new businesses and start-ups have
been raising money since the crisis.
With banks reluctant to provide loans to start-ups and venture capital firms preferring to invest in later stage companies, a growing class of experienced entrepreneurs and business people are stepping in to fill this funding gap.
These “angel investors” not only provide funding but also leverage their expertise to provide mentoring to the entrepreneurial teams in which they invest, according to a new OECD report.
100 interviews with entrepreneurs, policy makers and academics from 32 countries.
Financing High-Growth Firms: The Role of Angel Investors looks at angel investment around the world and includes over a hundred interviews with entrepreneurs, policy makers and academics from 32 countries.
Can you elaborate a bit on: "How did you fund it, with how much money, and what is the business model? This is for a lot of people great to read, how you did it, what route you chose, which hurdles etc. as for many this is a thing to consider when starting out. Also, on how you are dealing with the growth is interesting.
This is what I asked Charlotte Semler-West, serial entrepreneur and founder of Charlotte & Co, and prior thereto, founder of Myla. She replied:
I chose the fund the business start-up myself. I had previously founded and run a VC backed business start-up and I really didn’t want to go that way again. I can say the following….(probably more than you wanted!!!) (see further down in the interview, ed. SGB)
The Pipeline Fellowship, which trains women philanthropists to
become angel investors, has opened a call for applications from women social
entrepreneurs interested in presenting their businesses to its Boston and NYC
Pipeline Fellows.
Women-led startups will
present to investors who “get” their social mission, as well as their
for-profit business structure, and will have the opportunity to secure an
investment (up to US$50k) from the Pipeline Fellows.
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