Nowadays, it is so difficult to secure funding from a venture capitalist during the early stages of a venture. The early stages I am referring to are the seed or concept up to the startup stage. The concept stage is when research and idea formation still makes up the bulk of your activities while the startup stage is when testing is done and the prototype is nearing production.
It was not like this in the distant past. Before the stock market crash of 1987, it was relatively easy to find early stage venture capital. But because of the crash plus the influx of Japanese and Korean venture capitalists, investment in early stage venture capital began to lose its allure.
During these stages, you can mostly hope to secure funding only from angel investors. Unfortunately, the money that a single angel investor can come up with might not be enough. In fact, a single venture capitalist can easily match the amount that 10 angels can provide.
By now, an idea might be forming in your mind: Why not look for 10 or 15 angels instead? Surely, their combined money can be enough to fund research and other initial costs. Some investors might even have enough to take you through 2 to 3 years of operation. This means you'll have made some decent sales, set up a management team, employees, and probably even breached the break-even point.
With these conditions, you'd be ready for what most early stage capital provider would consider as an ideal environment for releasing funds. But the question is, how do you get to that point?
How about those 10 angels mentioned above? How difficult is it to find those? Well, if you look for each one individually, then it would take a lot of time. However, if you look for a group of angels instead, it can simplify your task. A group of angels is usually called an angel investor network. Angels group themselves in order to lessen their individual risks when doing an early stage venture capital.
Networks range from 10-150 members. Some of these networks can even raise up to $5 million and can cater to business locations that are geographically far from them. $1 to $5 million of early stage capital can already take your venture a long way. If you're really interested, you can try and look up angel investor network directories online.
It was not like this in the distant past. Before the stock market crash of 1987, it was relatively easy to find early stage venture capital. But because of the crash plus the influx of Japanese and Korean venture capitalists, investment in early stage venture capital began to lose its allure.
During these stages, you can mostly hope to secure funding only from angel investors. Unfortunately, the money that a single angel investor can come up with might not be enough. In fact, a single venture capitalist can easily match the amount that 10 angels can provide.
By now, an idea might be forming in your mind: Why not look for 10 or 15 angels instead? Surely, their combined money can be enough to fund research and other initial costs. Some investors might even have enough to take you through 2 to 3 years of operation. This means you'll have made some decent sales, set up a management team, employees, and probably even breached the break-even point.
With these conditions, you'd be ready for what most early stage capital provider would consider as an ideal environment for releasing funds. But the question is, how do you get to that point?
How about those 10 angels mentioned above? How difficult is it to find those? Well, if you look for each one individually, then it would take a lot of time. However, if you look for a group of angels instead, it can simplify your task. A group of angels is usually called an angel investor network. Angels group themselves in order to lessen their individual risks when doing an early stage venture capital.
Networks range from 10-150 members. Some of these networks can even raise up to $5 million and can cater to business locations that are geographically far from them. $1 to $5 million of early stage capital can already take your venture a long way. If you're really interested, you can try and look up angel investor network directories online.