I recently had the honor of moderating a New York Entrepreneur Week panel entitled Raising Seed-Stage & Angel Investor Capital in Todayâ€™s Environment.
The panel consisted of four early stage investor: of 500 Hats/Founders Fund, Geoff Judge of NY Angels/Metamorphic Ventures, Owen Davis of NYC Seed and Brian Cohen of NY Angels.
We wanted to avoid the bullshits softball questions that are usually asked at these events and you already know the answers to; I think I was successful.
A few of the key takeaways were:
The market for early stage funds much more vibrant than 12 months ago and there is plenty of capital out there.
1) The biggest pet peeves of the panelists when seeing pitches were as follows:
a) Not explaining the problem you are solving and just focusing on the product/service.
b) Glancing over the competition and not looking at the entire ecosystem of competitors.
c) Lack of customer understanding and customer interaction
2) The inevitable question around how do I contact an investor came from the audience and while views were mixed on the best way, it was unanimous that an intro from a mutual friend, colleague, partner, etc is by far the best!Â Some investors will look at â€˜cold-callâ€™ emails but increase your chance of getting thru the noise and get an reputable intro!
3) When posed the questions around what the panelists have learned from the one that got away (the investment they regretted passing on), the lessons learned included:
a) Donâ€™t overly obsess with the concept if the team is kick ass and the idea decent theyâ€™ll figure it out.
b)Donâ€™t drag your feet if you see something great donâ€™t be afraid to jump in (this goes for investors and entrepreneurs).
Lastly, the topic of valuation came up and Dave McClure brought up a contrarian view on valuation; but it makes great sense. In essence the view was start low and get investors excited once you have a few that are interested (and vice versa) let them bid up the round.Â This avoids the situation where your price investors out from the get go with sticker shock.