Have you ever started a company with the hope of finding an investor in a matter of weeks? I bet you have. Or – if this isn’t your case – I believe you have at least one friend who did.
No matter how great your idea is, if you can’t find an investor before running out of money or energy, the business is going to die. I know, ‘coz I have been there many times, I have failed a few times (officially we call them “learning experiences”) and have succeeded other times (but never as fast as I would).
So how much money do we need to save before jumping into a start up? And how many months of hard work should we prepare our spouse or fiance, to avoid a family crisis?
Thanks to Antonio Borges – founder of Hub Academy – I had the chance to speak with many startups at the Founders Camp in London. I have decided to pick a group of companies financed in the last 12 months, to understand if they have anything in common.
All these startups have received small investments (seeds) from £25,000 to £150,000 (€30k-190k or US$40k-240k). These companies have very different backgrounds, from online companies like Glopho (social network for news photos) of the former journalist Simon Walker, to its complete opposite, Ian MacMillan who recover copper from sunken ships. No matter the business, they all need a limited amount of money to start and – more important – they were so good to get it.
Fancy enough, all the startups provided similar answer about finding angel investors:
- they meet an average of 30-40 angels
- in order to get these meetings, they contacted an average of 150-200 angels
- it took an average of 2-3 months to get money from friends and families, and an average of (don’t be scared) 12-18 months to get money from angels.
- they usually agree that crowdfunding could have been faster, but they avoid it because they believe that convincing angel investors will look better in front of the venture capitals in a future round of financing.
This is not a scientific research, I chat with about 10 startups and most of the time in front of a glass of wine. Still I find the common answers between so many different companies very interesting.
All these companies are based in London, so I am quite interested to know about startup experiences in USA or other part of Europe. Is it faster?
And what do you suggest to speed up the process?
In my experience you can succeed only if you are ready to run a marathon. Damn tough!
Image credits: Simon Webster a.k.a. shaggy359 at Flickr.com