angel investor

9 Insights From Angel Investors About Raising Capital

Avoid early-stage startup pitfalls and secure the seed funding you need.

Not too long ago, I attended the App Idea Awards launch party. The event was at General Assembly in New York City and boasted an accredited lineup of top angel investors Jason E. Klein, Adam Quinton, Alicia Syrett, Zosia Ulatowski, and Jason Eiswerth.

Considering only 0.91 percent of startups are funded by angel investors and 57 percent of startups are funded by personal loans and credit, angel investors are looking for very specific information that will determine whether or not they choose to invest in your startup.

Below are some key takeaways from the event, including questions that everybody looking for funding should be prepared to answer.

Why are you doing what you’re doing?

Adam Quinton told the crowd that this is a question that he finds himself always asking. This gives the investor a deeper look into your mission and provides a story behind your passion. While seemingly a simple question, it does wonders for assessing one’s true commitment.

How can you differentiate beyond just different features?

Establish sustainable competitive advantage and prove it to the investors. Alicia Syrett stressed the importance of your entire concept and business model being unique. This will set you apart, showing investors that your company has longevity and won’t just be a one hit wonder.

Don’t just boast about how great your product is. Pitch the opportunities and benefits of joining the venture!

Time is limited when you pitch. Keep in mind that you’re selling the idea that the investor is joining you in business. You are not selling the product to them! When explaining the product, be thorough but concise.

This means elaborating on the product just enough so they understand how it works, but save enough time to talk about the business.

Don’t be too salesy. Refrain from saying things like “this is a one time opportunity.”

Although you may think that your idea is a “one time opportunity,” the investor will more than likely think otherwise. As I stated above, you are NOT selling them your product. Pitching arrogantly can be a major turnoff.

Know the specific TAM (total addressable market) size and your share.

Don’t be vague. Specify the exact market you’re attacking so the investor knows you are being realistic. Do your research to make accurate predictions of what your share of the market will be. This should largely determine the valuation you give. Although it’s hard to make perfect estimations, you want to show that you’ve put some thought into the numbers and they weren’t arbitrarily contrived. Consider these questions: Who are the leaders in your industry? Who are some direct competitors? What does your ideal customer look like?

Your Prototype/MVP needs traction. Speak with your customers/users.

Find potential users and ask for feedback. Collect the data about their experience with the use of the MVP. This will help you create a consumer base and refine the product. Presenting this feedback and discussing this information with the angel investor will benefit you and your business.

Have a long term vision.

Tell the investors how you see your business x years from now. If they are investing in your business, they want to know what the future will look like for you and your startup. And don’t forget to describe how you’re going to get there.

Have a really good sales and marketing plan and speak to people who know more than you.

Alicia Syrett really stressed this point. She explained that many entrepreneurs think that once they get funded, they’re set. They think word of mouth, connections, and some social media outreach will help spread their business idea to everyone. Unfortunately, especially in 2017, it doesn’t work like that. How will people find out about you? How will you beat out all of the other products being advertised online? Talk to marketers and those informed on the latest strategies for growth. Jason Klein cited the “if we build it, they will come” fallacy, pointing to the fact that a great product no longer ensures a great business.

Get to know the investor. Do your homework so you can relate to them.

When the investor asks you if you have any questions for them, don’t pass up this chance! Do some research before speaking to them and ask relevant questions. Your ability to do this well is another indicator of your talent and drive.

Moral of the story? There are so many factors at play when trying to convince an angel investor to come onboard. Most of the time, an entrepreneurs’ perceived chances of success are greater than in actuality. In fact, when surveyed, 81% of entrepreneurs believe their chances of success are at least 70%, but only 25% of startups succeed or make it past 5 years (Springer Link). Don’t expect every investor to understand and love your idea like you do. Explain everything and leave nothing to assumption.

If you have a great idea and want some feedback from investors, advisors, and other entrepreneurs, sign up for our pitch event. We’d love to see you there.

 

virtual reality vr development nyc

Tech Update: Up and Coming in 2017

How virtual reality is set to dominate this year.

This past Christmas, millions of people unwrapped virtual reality (VR) headsets, ready to dive into the exciting (and realistic) world of 360 video.

Using apps such as YouTube, Orbulus, Seene, and many more, users are put in front of a surreal video that is rather entertaining or even therapeutic gaming system. The headsets range in price from $10 to nearly $800. With shockingly realistic sound effects and images, the system is unlike anything technology has seen before.

Just two weeks ago, Facebook announced it would split Oculus (Mark Zuckerberg’s original plan for VR created in 2014) into two divisions, one focusing on PC-based VR, and the other on mobile (SOURCE: Top Tech News). With other companies working to further expand the technology of virtual reality; it’s definitely here to stay and only getting better.

Virtual reality is not only for gamers though. Virtual reality is also useful for architects and construction workers because it gives users the opportunity to become fully immersed in their surroundings. In fact, the gaming system can seem so realistic, that “it’s easy to completely lose your sense of place in the real world” (SOURCE: Metro UK).

Now, you might be thinking, why in the world are people spending money on such a scary device? Well, the fact is simple. They’re affordable, they’re entertaining, and they’re different. According to Forbes, “these mobile VR headsets are easy to use and work with many existing smartphones, which is appealing when compared to expensive high-end VR hardware”.

While America is becoming fully engaged in the world of the virtual reality, China is a couple steps ahead of the United States. China has adapted to VR cafes, VR pods, and more (SOURCE: Forbes). A survey completed by Niko Partners showed that more than 50% of Chinese gamers are interested in VR and “almost 30% are willing to spend up to $200 USD on a device, which is significant considering the average income in China hovers around $12,000 per year” (SOURCE: Forbes).

Alyssa Orcuilo is the Head of Marketing at TechSuite. She is passionate about graphic design and journalism.

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mobile app development nyc

Your Marketing Efforts Are Neglecting This Key Consumer

Does my business need a mobile app?

Since 2008, mobile apps have become increasingly popular. There are now over 224 million monthly active app users in the US (Source: Search Engine Journal). Whether your customers are on their morning commute or coming home from a long day at the office, they’re most likely looking at their phone during (some of) this time. In fact, U.S. adults spend an average of 2 hours and 51 minutes a day on a mobile device and 89% of their time is spent using mobile apps (Source: eMarketer). If they spend just a fraction of that time looking at your mobile app, this will inevitably increase your sales, customer loyalty, and brand awareness. Why? Because according to the principle of effective frequency, the more somebody hears or sees your brand, the more likely they are to notice you, the more inclined they become to purchasing your good or service.

So why can’t I just invest heavily in traditional advertising? Because you would be neglecting a whole demographic: millenials. They just so happen to make up one quarter of the nation’s population (Adobe), are set to be your consumers for the next 50+ years, and are only getting more tech-oriented. And guess what? 84% of them don’t trust traditional advertising (Hubspot).

I have a website so I’m covered right? Wrong! 85% of people prefer mobile apps to websites (Source: Compuware). Put yourself in a consumer’s shoes. When a website is taking too long to load or you can’t find what your looking for, you get frustrated. Mobile apps are inherently more responsive and easier to use. Your competitors are doing their research. Don’t let them beat you and capture your target market. Inquire about a mobile app with TechSuite today.

Want to learn more about creating a mobile app? Visit techsuitenyc.com to get started.

Alyssa Orcuilo is the Head of Marketing at TechSuite. She is passionate about graphic design and journalism.

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