Fundraising 101
Aug 27, 2024

Skip the VCs: How Angel Investors Can Fuel Your Startup 💸

Discover how angel investors can fund your startup without the pressure of traditional VCs.

How to start saving money

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Why it is important to start saving

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How much money should I save?

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What percentage of my income should go to savings?

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We’ve all heard the startup fairy tale: a scrappy founder catches the eye of a venture capitalist, lands a mega-funding round, and rides off into the sunset on a unicorn worth billions. But let’s be real—VCs aren’t fairy godmothers. They’re more like sharks with checkbooks, and they expect their investments to grow faster than a viral TikTok trend.

Here’s the kicker: VCs typically want to see your startup rake in $100 million in revenue within five years. Yep, you read that right—$100 million. That kind of pressure can turn even the chillest founder into a caffeine-fueled, growth-obsessed maniac. And guess what falls by the wayside? Things like worker well-being, environmental responsibility, and—oh, I don’t know—actually enjoying the process of building your company.

But don’t panic. If the VC grind doesn’t sound like your cup of artisanal matcha, there’s another route: angel investors. 🕊️

Why Angel Investors Are the Cool Kids in Town

Angel investors are like the indie rockstars of the investment world. They’re not playing by corporate rules; they’re in it for the love of the game. These folks are successful individuals with cash to spare, and they’re looking to support promising startups without the soul-crushing expectations of VCs.

Here’s the beauty of angels: they don’t have to deliver ridiculous returns to a bunch of institutional investors. This means you, as the founder, get more breathing room to grow your business at a pace that works for you. No need to “go big or go home”—you can go big and stay sane.

Angels are often in it for more than just the money. Sure, they’d love to see a return on their investment, but they’re also driven by the thrill of backing something cool and watching it take off. They’re the kind of people who get a kick out of being part of the next big thing before it’s big. And that gives you the chance to build a business that’s not just about making bank, but about making a difference.

How to Charm the Angels 😇

So, how do you get these mythical beings to invest in your startup? It’s all about putting yourself out there and making those connections. Here’s how:

  1. Cast a Wide Net
    Don’t just pitch to the usual suspects. Talk to everyone—your dentist, your neighbor, that one friend who always seems to be on a yacht. You never know who might have some extra cash lying around and an itch to invest in the next big thing.
  2. Ask for Referrals
    If someone says no (and let’s face it, some will), don’t just slink away. Ask them if they know anyone else who might be interested. Most people love to play matchmaker, and a warm intro could be your golden ticket.
  3. Embrace the Awkwardness
    Pitching your startup can feel like asking someone out on a first date—awkward as heck. But here’s the thing: it gets easier the more you do it. So lean into the awkward, keep pitching, and soon enough, it’ll feel as natural as swiping right.
  4. Nail Your Elevator Pitch
    Imagine this: you’re at a party, someone asks what you do, and instead of mumbling something about “tech,” you hit them with a 15-second pitch that leaves them wanting more. You don’t need to whip out a slide deck—just be ready to drop a killer one-liner that sums up your business and your vision.

Awkward, But Effective: Elizabeth Yin’s Optometrist Pitch

Elizabeth Yin, a GP at Hustle Fund, did something wild during her fundraising rounds—she pitched her eye doctor. Why? Because eye doctors make good money.

Turns out, her optometrist wasn’t just checking vision; he was also a part-time investor. While he didn’t invest in her first round, Elizabeth learned something valuable: he’s a warm lead for the future.

After he politely declined, Elizabeth asked a simple question: “Do you know one person who might be interested?” He did. Feeling a little bad, the doctor connected her with his wealthy friends, and her fundraising efforts continued.

Sure, pitching was awkward—but as Elizabeth says, “It’s always awkward at first.”

The Bottom Line: Build a Business That Rocks 🎸

Angel investors offer a path that lets you grow your business on your terms. They’re not just throwing money at the next big thing—they’re backing founders who are passionate about creating something meaningful. By tapping into the angel network, you can build a company that balances growth with values, like empowering your team, giving back to your community, and maybe even saving the planet (no pressure).

So if the traditional VC model feels like a suit that’s just a little too tight, maybe it’s time to try on something a bit more your style. Get out there, start making connections, and see where the world of angel investing can take you. After all, not all heroes wear capes—some of them just write really cool checks. ✌️