The old adage of “Always be selling” definitely applies to fundraising. One of the things I didn’t realize as an entrepreneur was that at the seed stage, anyone could potentially be an investor. A lot of entrepreneurs just think to pitch to VCs, well-known angel investors, or people who have signaled they are angels on Angelist. The reality is that angel investors can be anybody, especially these days, now that non-accredited investors can invest much more freely. Angel investors can be people without a tech background: doctors, lawyers, bankers, engineers, etc. They can even be your users and customers; for example, The Hustle raised $300k from its readers in 50 hours.
You no longer need to be super rich or write big checks to be an angel investor. In fact, many angel investors in Silicon Valley are not! I have friends who save $10k a year just to angel invest $1,000 in 10 companies per year via syndicates on websites such as AngelList. For them, they see this activity as an investment. They invest in startups much like they invest in index funds on the public markets by putting a little bit of money into many different companies. Many “regular” people invest in large diverse portfolios as part of their retirement savings strategy.
Furthermore, angel investors also see this as an investment in themselves. Often, being an angel investor – no matter how much money you are investing – is a great way to network. You have the opportunity to meet and get to know other investors in your portfolio companies. Investing in big index funds, while a good retirement strategy, doesn’t allow you to meet other investors in those funds. But investing $1k into a startup can often get you an invite to free VIP events that that startup throws for its investors.
Saving $10k+ per year to invest in startups, while not possible for everyone, is within reach for a lot of middle class and upper-middle class people who are interested in investing in their retirement. As a startup, there’s a huge audience to pitch to — just about anyone who is doing just fine in life can be your angel investor.
But most people who save $10k+ for their retirement per year don’t advertise that they are angel investors. They don’t have a website talking about a fund or their investments. They don’t signal they angel invest. So, it’s hard to tell who might be interested in potentially angel investing in your deal. This is why it’s really important to hone your elevator pitch and constantly get other people excited about what you’re doing in case people you meet are angel investors or know investors who might be excited to invest in you and your company.
Always be pitching.