Nivi · May 21st, 2011
We’ve covered this before, but it’s worth repeating: don’t raise money in series, raise it in parallel.
Don’t talk to one investor at a time, talk to all of them at once. It’s the only way to get market-clearing terms.
Meeting every investor over a short period of time creates a positive feedback loop of social proof and scarcity that closes deals.
Recently, we’ve noticed a new way of making this mistake. The entrepreneur says, “I’ll use AngelList if my other intros don’t work out.”
If you can get intros on your own (and all the good startups can), you should use AngelList at the same time, not afterwards. Why?
First, no matter how good your offline network is, it’s unlikely to introduce you to the optimal investors, or help you close the deal as quickly as AngelList can.
Second, if your other intros don’t work out, AngelList probably won’t work out either — the startups that do well on AngelList are the ones that use it to complement their offline intros.
This is a really interesting idea – love the creative “door-to-door” description of the way that many entrepreneurs go about looking for investors.
I had not heard of this site before, but it is a good addition to a strategy that would incorporate other ways to reach potential investors.
Great post!