angel investor

5 Ways To Raise Money Without an Angel Investor

How do I raise capital for my startup?

You’re walking down 21st St on your way to your job at 7am. All at the same time, you’re thinking about those spreadsheets you have to put together for that presentation, the evaluation form you’re about to receive from your boss, and…your billion dollar app idea. “I’m a hustler baby” by Jay-Z is playing in the background. One problem: you haven’t raised even a quarter of the necessary capital to start up. Sound familiar? Well guess what…

If you’re a hustler, you can do it.

gary vee vaynerchuk hustle

Bold statement, I know, but hear me out. If you plan to go into business, you have to be able to sell. And if you’re capable of selling, you’re more than capable of raising money. I understand that finding an angel investor, one that fits in with your vision and can guide you on the path to success, is either not in your current plans, or is taking a little longer than expected. It’s time to stop searching and start doing. I hereby present you with 5 ways to raise money without an Angel Investor:

1)         Crush it on Kickstarter.

“Crowdfunding, dude” is something you probably hear a lot when you tell your friends you’re looking to raise money. Thanks to sites (hyperlink) like Kickstarter, you can raise over a million dollars from complete strangers. The kick with this one, no pun intended, is the fact that you need to show your potential backers that it’s worth it, and that starts with a kick-ass blurb, a super-compelling explainer video, and a satisfactory reward once your product comes out. Yes, it’s true, technology is the least successful “category” on the platform, but 30% of tech projects get at least 20% funded, and that statistic proves it’s definitely worth a try.

2)         Friends, family, fast.

friends and family funding

This is the one that’s extremely overlooked. Data from Forbes and Entrepreneur suggests investors are less likely to invest if you haven’t raised FnF money, and 25% of all startup capital comes from here. When you think about it, this group is the easiest to convince to back you because they are already biased – they know you and (hopefully) love you. Show them a business plan and how they’re going to get their money back (and more) via a convertible note, and you may very well be on your way to your MVP faster than you thought. When it comes to best practices, it’s optimal to leave them out of your business operations, but by all means leverage their network and connections as much as you can to grow your company. If they see your passion and fire, they are more likely to back you financially, but make sure the expectations on how involved they’re going to be with the business are set from the start.

3)         Sell your stuff.

Maybe it’s time to head to your basement and see what’s down there. Who knows – maybe you’ll find a valuable item or two. I know it’s tough to part ways with your baseball card collection from when you were nine or that vase you received from your aunt seven years ago yet never found a place for, but be honest with yourself – will you ever have a use for this item? Does its sentimental value outweigh the value you’re getting in return a.k.a the ability to fund your venture? If the answer is no, you should check out ebay.com. I can personally relate to this one really well, because in order to start TechSuite as we know it today, I had to sell my entire sneaker collection. Yes, it was awesome to have the original Yeezys, but I only wore them once every few months, and I was much more excited by future growth. Point is, if you’re truly passionate about what you do, parting ways with your perceived valuables shouldn’t be too hard.

4)         Save up.

save money

Between your day job and your startup, you work 12-18 hours on any given day. Obviously, you deserve a reward for your hard work, and want to use your money to splurge a little, whether that be picking up a tab or two at the bar, or taking your special somebody to a nice restaurant. I’m all for enjoying the fruits of your labor, but this is another case where you have to decide what’s more important to you. To put it into perspective, saving just 500 dollars every week can get you a prototype within a month and an MVP within five, and there are plenty of budgeting apps to help you do this. Exeq (hyperlink) is one I’m personally super excited about.

5)         Start a business to fund your business.

This is my personal favorite one. Nothing screams hustler like buying low and selling high. In fact, I built up my sneaker collection through 3 strategies:

1)         Camping overnight for highly anticipated sneakers to get them for retail price, then reselling them for much higher when they would sell out.

2)         Buying a used sneaker for $100, then scouring Facebook groups for opportunities to keep trading up, until $100 turned into $1,000.

3)         Buying sneakers in bundles for “package deals” then reselling them individually.

This approach can be applied to almost any industry. In this case, it makes sense to have more of the “quick buck” mentality, because remember, you’re doing this to be able to back your real thing. I’d recommend checking out Alex Becker’s Youtube channel for more ideas on how to make quick money.

Mix and match.

You can definitely do more than one of these things at the same time as a means of raising money. Don’t put all your eggs in the same basket – by “diversifying your portfolio” of fundraising activities, you’re maximizing the chances that you reach your target amount. If your startup is your baby, you’ll hustle to make it happen. This could very well be what gets you to that next level, like a meeting with your dream Angel. Stay lean, stay scrappy, and keep grinding.

 

Mitchell Sapoff is the COO of TechSuite. He is passionate about accelerating innovation & H2H relationship-building.
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The real reason your competitors are beating you to market (and how to respond).

Being slow to act on your idea may be one of the biggest mistake you’ll ever make.

We all hear it: the best ideas in the world evolve at the drawing board, but aren’t born there. The best ideas happen when we’re on the toilet, in the shower, or better yet, when we get screwed over by something or somebody, and we think to ourselves, “there’s gotta be a better way.

Eminem thought of his alter ego, Slim Shady, on the toilet.

So to a similar entrepreneurial tune, in the first semester of my freshman year of college, I discovered a day-to-day problem that can be solved with a mobile app. I was determined to make it a reality, but I wasn’t technical, so I reached out to every developer I knew – out of those 10 or so people, none of them were interested. Not that they didn’t believe in the idea; they just simply didn’t have the time or the willingness to work on it with me when they could go do the same thing by themselves.

Mark Zuckerberg, the hacker, wanted to do it without Winklevoss twins, the businessmen.

I was also definitely not considering an app development company– they were all way out of my budget, and after discovering Freelancer.com and Upwork, my due diligence on cheap offshore freelancers had discouraged me. After all, I only had $6K saved up from selling sneakers and I wanted to make every dollar count.

There’s a sub-par level of transparency in the software development industry.

So I waited. Waited for the semester to end so I would have more free time. Waited for a good, affordable developer to magically appear out of nowhere, but of course to no avail. By December, I had spoken to over 100 people that this product would benefit and they were all behind it. But I still couldn’t find a developer. Sound familiar? I decided to put the venture on hold until a dev came my way. Mistake number 1.

Stop waiting around for a miracle to happen. Act now.

Around spring break, I got a notification on my phone that one of my friends has invited me to download a certain app. Then I got another one. Then I got 15 more. I thought to myself, damn, if all these people are inviting me to join the app, it must be good.

When I opened it up and explored, I’m not kidding when I say that this app was almost identical to my idea. The difference was, it was on the market and mine wasn’t. The harsh reality is that no matter what your parents tell you when you’re growing up, your brilliance has the contention of many others.

Your brilliance has the contention of many others.

In fact, there are thousands of people in the world right now that are experiencing the same day-to-day problems as you are and have a resemblant sense of how to fix them. If nobody had or has a similar idea to yours, chances are it’s probably not good enough. The only thing that really matters is whether you execute on it, and how you do so.

There’s nothing wrong with some healthy competition.

When I saw this app, I immediately thought to myself it was too late, that I had missed the boat. Mistake number 2. Even if you’ve already lost first-mover advantage, all hope is not lost. Christopher Columbus wasn’t the first one to discover America, but you don’t see us celebrating Amerigo Vespucci Day.

Use the competitor that beat you to it to your advantage.

Go to the 3-4 star reviews of your competitor on the app store and see what users think should be improved/added/changed. Implement a different business model. Hustler harder than your competitor, be more inspiring in your message/mission/vision, be more creative in your design and in your copy, the list goes on and on.

Facebook didn’t come first, but it crushed the competition.

I didn’t do any of this. I didn’t act on my idea at all. Needless to say, this app took off and grew rapidly, which posed a new real-life day-to-day problem for me: how do I stop entrepreneurs with more resources from beating me on the market? The solution is simple: make app development affordable and accessible for everyone with a great idea and a drive to make it happen. And this time I acted on my idea. I took the $6K I’d saved up from selling sneakers and made every penny worth it, so that everybody else can do the same. My idea has turned into TechSuite, and we’re changing the status quo for app development.

Mitchell Sapoff is the COO of TechSuite. He is passionate about accelerating innovation & H2H relationship-building.
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What we learned from hosting our first event.

Sooner or later, it’s going to make sense for your startup to hold an event. If done right, it’s a great way to gain exposure and make sales without coming across, well, salesy. The most successful events are usually ones that feature a prominent guest speaker, an accredited panel, or an exciting showcase. We did a pretty daring thing, incorporating all three aspects into our event that we hosted last week. And while this at face value may come across as a recipe for success, it’s a strategy with the greatest chance of something (or everything) going wrong. The good news is that we, and you, can learn from our mistakes the first time around. Here’s the good, the bad, and the ugly from our event, and how we’re going to adjust next time.

What went well

1)  We predicted the turnout super accurately.

   Depending on where you read it, sources will tell you that out of all registrants, 40-60% will sign up. We decided to go with the worst case scenario, opting for 135 chairs for 334 registrants because we figured it’s better to have a full house with some people standing than having empty seats. We ended up having roughly 140 people show up, so if this is your first time hosting an event, I would very highly suggest using these metrics.

2)  Networking, networking, networking.

 Let’s face it; at the end of the day, as much as we attend events to learn or observe, we’re ultimately in it for the networking. The problem though is that many of us are inherently introverted, so at best, we’ll hold off until after the presentation to start up a conversation with an easier opener, like “so, what’d you think?” That wasn’t the case here though. It seemed like from the get-go, nobody was afraid to meet as many people as possible and make their presence felt. We hypothesize that it had something to do with the friendly, laid-back atmosphere of our host venue, WeWork. There, openers are super easy. You can start with something like “hey, do you know what kind of beer this is?” or “wow, this place looks super startupy, do you love it as much as I do?” Corny, but works every time.

3)  Social media.

 Hosting an event gives you the power to tell people what to do. Think about it – you have 100+ people in a room with all eyes on you. Leverage that. In our case, we just so happened to have an unused pair of Snapchat Spectacles lying around, so we decided to put them to good use. We decided to do a giveaway contest at the event, and in order to enter, you had to like us on Facebook and share our Livestream of the event. Let’s just say that since last Tuesday, our Facebook likes have almost doubled and we’ve reached over 5,000 viewers with our video. How’s that for free marketing?

Not so well

1)  Wine, beer, restroom?

 I’d say out of the 140 attendees, about 80% of them at one point or another asked where one of those three things is located. Unfortunately, we didn’t have wine, which ticked off multiple people for whatever reason. Additionally, half my time at the event was spent walking people to either the restroom or the kitchen. Easy solutions: supply the wine and have signs pointing to basic amenities.

2)  We fell well behind schedule.

Our presentation was set to start at 6:30, but people didn’t get settled in until 6:45. Moreso, we scheduled a showcase of 8 startups to pitch for 5 minutes each with 2 minutes of feedback from the judges. Nobody adhered to this, and understandably so. Many of the startups went too in-depth into their slides, often reiterating what was already on the board for the audience to see. The judges had awesome feedback and a lot to say, so they went overboard as well. After half of the startups had presented, we noticed the room was getting a little restless, so we held a short intermission, and watched as some spectators shuffled out. Lessons learned: A) Plan for the worst. Build your agenda around the event starting a little bit late. B) Have a timer. Make it obnoxiously obvious when the startups’ time is up. C) The feedback might have very well been the most valuable part of our event. Instead of shortening the feedback portion, perhaps subtract something from the agenda. D) Keep it engaging. Better to maintain a lively atmosphere than try to do damage control when you’ve already lost the crowd.

3)  Social media.

  It’s a blessing and a curse. While yes, we did get 5,000 impressions, we also had sub-par audio and lighting quality on the stream. We received countless messages and notifications asking us to fix it, and no matter what we tried to do it seemed like nothing was really working. While we still gained good exposure for TechSuite and WeWork, we did not achieve our goal of getting audience feedback for the startups. I can’t stress this enough: make sure there are no issues with the stream prior to the event. Set it up like a “dress rehearsal” with the same conditions and you should be fine.

Although I talk about problems and solutions in the context of our own event, they can very well be applied to most startup events. We’re willing to admit our own mistakes because we know that in the end, that’s how we improve. The main takeaway is, you can never really anticipate EVERY issue that may arise, but it’s important to be prepared for anything that might be thrown your way. Hopefully this article has made it easier for you to do just that.

 

Mitchell Sapoff is the COO of TechSuite. He is passionate about accelerating innovation & H2H relationship-building.