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Episode 011 Show Notes
Seemingly Random Tips on How to Raise Money Pre-Revenue:
Go for angel investors:
They have money and they are more interested in changing the world than VC's. Sometimes they aren't interested in a return at all.
Clear Attraction, Interaction, and Transaction Model
Attraction - Why would people be interested in your business at all. A good cause.
Interaction - Delivering the product. Do the people understand it and want to work with it and share it?
Transaction - Not even Facebook has a good transaction model. But you have to have a good model to exchange value with customers, and make money.
If an investor doesn't like your idea it may mean that he isn't the right match. But you can't be clumsy with your idea, you must be clear.
Tear your idea apart to make sure that it is good and you are clear before you get in front of investors.
There are three different types of investors.
Sharks just want the money.
Philanthropists are largely motivated by world impact.
Most are in the middle, but all of them still want a return on investment.
Getting investor money is all about your connections.
Make a list of all the investors that you have any connection with.
Do research and narrow down the list to the people who are a good fit for your business. A good personality, interest fit, and have enough money, etc...
Personally call/email each one (his list was 1000 people).
Christoffer's Results?
He got meetings with half of the list because he had a connection with.
35 angels invested the first year.
Their pitch was very clear. They weren't looking to build and app and sell. This is a long term deal.
You have to put in the work to find the right investors. They personally contacted 1000 people for Sprinklebit.
There needs to be validity to your idea. Do the research. The market and the plan have to make sense. Harry Markowitz, a Nobel Prize winner, endorsed it Sprinklebit before they pitched investors.
Planning:
Be clear about the purpose and the end goal.
Hate your product and start to tear it apart, so you are prepared for the investors' questions. You have to be perfectly clear. Be objective with your idea. Really find out if you would use it or if other people would use it. (This is all pre-production.)
Don't cut down your ideas, cut down on your strategy. Prioritize your strategy. Strategy is how to build attraction, interaction, and transaction.
Team Building:
Don't focus on your team for pre-rev fundraising. Be agile. Do it by yourself. You can get all the expert advice in the world online in forums and groups. You don't need to hire the expert advice as you create your blueprint.
Once your blueprint is done and you have funding then hire for long-term employees that will make up a productive agile team that will help you make decisions. Be fair with them, make them be fair with you. Either way, they will quit. You can't afford that pre-rev and pre-funding. Don't hire for relationships.
Leadership - You are the lowest in the hierarchy. They will tell you what is up. Pay attention to their advice, think about it, and compare expert advice with the market, and make a final decision. Your employees are in charge of you, but you are in charge of the company.
Connect with Christoffer Wallin:
Blog
Email him at - info@pindify.com
SprinkleBit
