C H A P T E R O N E
The greatest challenge for entrepreneurs in starting
and growing a company remains simply money. Though easy to state,
financing your venture is a time-consuming, complicated, inefficient,
and frustrating process. Entrepreneurs have often compared it to Win-
ston Churchill’s line,“A riddle inside a mystery wrapped in an enigma.”
This book attempts to provide you with information, guidelines, and
resources to take the mystery out of the process. Don’t be fooled, how-
ever. Raising capital is hard work and you must be well-prepared for
every opportunity to pitch your company, either planned or unplanned.
Remember the age-old adage: You can only make a good first impres-
sion once. It is infinitely true in raising capital.
Traditional funding sources—angels, venture capitalists, commer-
cial banks—have a plethora of investment and funding opportunities.
Your ability or inability to clearly and succinctly communicate your
market focus and financial projections can make the difference
between bringing your dream to life and shelving your brilliant idea.
Therefore, preparation is key. This book will help you understand how
angel investors think, how to identify their expectations, understand
their investment analysis process, and prepare for post-investment
Just as no two people are alike, no two angels or angel groups will
have the same hot buttons or demands. Through this book, you will
gain a broad understanding of angels and angel investing. Be mindful
that angel investors have varying degrees of sophistication and expe-
rience. The book will prepare you to deal with the most knowledge-
able angels. Even with experienced angels, preferences on investment
terms, depth of due diligence, and post-investment involvement will
vary. Therefore, you will learn about multiple scenarios to minimize
surprises you may encounter in your dealings with angel investors.
You can use this book as a reference guide for understanding and
preparing yourself and yo