Why asking for advice when you want money is bullshit

Founder: And then that angel investor said, “This is definitely interesting.  Lemme intro you to these two people.” This has happened 3x in the last 2 days but none of these angels have written a check – is this bad signaling?

Me: Oh, not necessarily.  Angel investors are not professionals, so it’s not necessarily bad signaling since they may not do many investments.  Unless you’re talking about a really prolific angel.  Did you ask him to invest?

Founder:  I didn’t ask because I thought that if they actually wanted to invest, they would ask? We went with the strategy of asking all of the angels we were in touch with about “advice on fundraising” with the idea that the conversation would naturally transition to an investment if they were actually interested.


So here’s the old adage in its entirety: If you ask for money, you’ll get advice.  And if you ask for advice, you’ll get money.

The truth is, this adage sometimes works…but more often than not, it doesn’t.  If you are fundraising in America, you really should be asking for exactly what you want – ESPECIALLY WITH ANGEL INVESTORS.

Originally posted by dokyummm

Let’s dive into this more.  (And feel free to jump in the comments to tell me how wrong I am… 🙂 )

1. Angel investors don’t see themselves as investors

They really don’t.  And this becomes more and more true everyday.  Why?  Because now on sites such as AngelList, you can plop down $1k into a syndicate, and even if you do 10 deals a year, you’re still only investing $10k a year – just like you might into your 401k plan.  These angel investors are really just everyday upper middle-class people.  Mostly tech workers.

First and foremost, angel investors see themselves as whatever their profession is.  So, let’s say you ask for advice from a UX designer who is doing, say, 5 deals a year; you’re going to get advice about your design.  He/she isn’t going to think of it necessarily from a fundraising perspective.  This is especially true if you’re talking with other entrepreneurs who happen to be angel investors.  Flip the situation around: if someone thought you were rich and came up to you asking for advice, you’d think they wanted advice, right?  You wouldn’t just start throwing money around.  It’s really no different as you climb the entrepreneurial success ladder.

For VCs, it’s their job to invest money.  They can’t take the fund money and use it towards non-investments.  But angels – it’s their money.  They are not necessarily going to use it towards investment-related activities.  They could buy a boat.  Or a car.  Or redo their backyards.

Even if someone presents an exciting opportunity in front of them, they may not even be thinking about investing their money.   You need to be clear about what you’re looking for so that an angel investor doesn’t have to try to infer the situation.

2. Many angel investors write small checks and are not going to initiate a conversation about your round

As a follow-up to #1, many angel investors write small checks, and so they are not thinking about starting your round.  It doesn’t mean that they would be averse to writing a check earlier in your round, per se, but they don’t really want to negotiate terms with you.  They also would prefer that there are other people in your round so that you have enough capital to achieve your milestones.

Unless you dive into the weeds around your fundraising – i.e. explicitly talk about your round and who is in and all that jazz – angels would just rather avoid the headache.

3. Angel investors don’t want to have an awkward conversation with you

Which leads me to my next point.  VCs already beat around the bush and hate saying uncomfortable truths because they don’t want to ruin potential financial opportunities down the road with you.  But angels are even worse. They are not used to delivering tough news or feedback, since it’s not their job.  They want to be your friend.  Heck, in many cases, angels may be your friend or your friend’s friend.  It’s just awkward to talk about fundraising.  Here are some awkward things about fundraising that they may want to avoid thinking about:

  • You may not want them in your round since you didn’t ask, and so they won’t ask you about your round
  • You may have too high of a cap, and they don’t want to express interest in your round only to back out
  • You may not have enough traction (either fundraising traction or revenue traction), and it’s awkward to ask about traction if you’re not a professional investor
Originally posted by wifflegif

All in all, I would just come out and be explicit with what you’re looking for.  Now, I know that it can be awkward to ask for money or ask someone to look at your round, so here are a couple of phrases that might help you out:

  • Hey – since I know you do some angel investing, I wanted to get your thoughts on our round…
  • I’m curious if this is the type of angel deal you might be interested in?

Would love to know what other people’s thoughts are on this topic. Feel free to comment below.

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