Entrepreneurs: What NOT to do!
Advice from Angela Lee, Founder & CEO, 37 Angels
Angela is also the Chief Innovation Officer at Columbia Business School. She started 37 Angels, a community of women investors with a mission of educating early-stage investors. Only about 13% of Angel and Venture Capital investors are women and Angela wanted to close the gap from 13 to 50, hence the name "37 Angels." Here are Angela's tips for what NOT to do:
1. When pitching for funding, do not spend too much time on the product. Focus on the team, market, and customer acquisition process. The product may change or evolve. You may have a great product, but the investors need to know that there is product/market fit as well as a market opportunity. Investors need to have confidence in you, your team, and your ability to build the business and to scale it successfully.
2. When fundraising, in addition to cold outreach, leverage your network.
80% of the companies in the 37 Angels portfolio come in through referrals. Use your LinkedIn connections, university/industry contacts, and networking connections to reach your desired target. And do your research! Look at that investor's portfolio and understand what they invest in. If they focus only on B2B, don't pitch them your B2C startup.
3. When growing your company, do not underestimate the costs of sales and marketing. When growing your company, do not underestimate the costs of sales and marketing. Hiring a marketing director, training salespeople, paying for copywriters, email lists and so on are expensive. Be prepared to budget realistically for customer acquisition costs. A mistake that founders make is to assume that a salesperson will be effective day 1 - recognize that they will take 3-6 months to ramp up and they might not be able to sell your product as well as you can. Salespeople will take longer to achieve your closing ratio so factor that into your projections.