You have identified a large and growing market, built an MVP and acquired a few customers. You believe that you will have a business that will be attractive to VCs in 12–18 months but you need £250K to hit the metrics that they demand. Everyone is telling you that you need to find an angel investor or more likely a group of angels. However, finding them is easier said than done.
I was chatting to a Russian investor yesterday. He has made investments in London, Silicon Valley and Tel Aviv and put forward the view that early stage investment was often controlled by a small group of insiders. In the Valley, for example, the best startup investment opportunities are never put out to the broader investor community. He is sometimes asked whether he would like to ‘join’ an investment opportunity as if it is a special privilege.
It got me thinking about the London investor scene and whether something similar exists here. I believe it does, but it is much smaller and therefore even more difficult to penetrate.
Some of you will be familiar with those lists of investors that have circulated on groups like London Startups on Facebook. Well, surprise, surprise, these are not reliable. The VCs are usually accurate because they are easy to identify simply through their websites. However, the angels are either already invested out, were never investors at all, are in the wrong territory etc.
I started to think how best to build the ‘real’ list and realised how important it is to identify the movers and shakers. These are the guys who have been there and done it before. The founders of startups such as Just Eat, Transferwise, Shutl, Songkick, Love Film and the likes. In addition to these there are small numbers of potential tech investors embedded in the main angel networks plus a group of newbies who have the money but not experience. These are good to build a round behind the lead investors.
I have ended up with a list of 100 influencers. These are people that I believe can make a round happen by bringing a combination of expertise and capital. I am meeting as many as possible and inviting them to review the startups on our platform. I have learned that building a round is very strategic. Founders need to be well prepared and pitching at the right level. They don’t get many bites of the cherry, exactly because it is a small community of investors.
Blog by Paul Dowling — Co-Founder of Dreamstake the world’s first tech startup platform to match over 16,000 founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders create profiles on the platform and get curated introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]