Mapping the Path to the Investment Community

Judy Robinett notes that angel investors like herself want to invest, you just have to find them. A key first step is to understand the investment ecosystem, particularly the different categories of investors and their expected exit strategies (including the amount and time of return).

Robinett’s path to business funding includes:

  • Studies have shown that there are over 300,000 angel investors, primarily located in California and the East Coast
  • She got started in business with a $1.3 million SBA loan to fund a franchise restaurant, which almost went bankrupt before she turned it around
  • Later worked with the Rick Alden, the founder of Skullcandy, when she worked with an angel to vet the company
  • Investors are drawn to the high returns (22% or higher) that new businesses present
  • The funding ecosystem
    • Personal funds (100% of businesses)
    • Friends & Family (51%)
    • Angel Investors (66,000)
    • Venture Capitalists (3,700)
    • Family Offices (NA)
  • Hair on the Deal
    • Proper Legal Protection
    • Intellectual Property Secured
    • Board of Directors
    • Existing Shareholders Issues
    • Unrealistic Valuation
    • Lawsuits
  • Critical to find the Angel community, e.g., Angel List, Gust, Equity Net, Golden Seeds
  • Expectations of different categories of funders is different, e.g., Angels (3-5 years), Venture Capitalists (10 years)
  • Crowdfunding such as Kickstarter, Rocket Hub
  • The money is out there
    • Get in the right room
    • Have a concise and compelling pitch
    • Ask for help