We are learning funding isn’t beyond the realms of mere mortals and we are learning how to make that possible. This is advice given by Bill Morrow, co-founder of Angels Den, (www.angelsden.com) which is the largest funding platform of its kind in Europe. It facilitates both angel investment and crowdfunding. This post is part two of this post https://www.phoenixfm.com/2013/12/19/is-there-really-any-money-out-there-funding-tips-from-bill-morrow-founder-of-angels-den-part-one/
Have a crowd that cares and ask for their help
The first thing any entrepreneur needs (and by entrepreneur I mean any individual who wants to start making profit from their idea) is a community.
Bill Morrow says that you need at least 200-400 people on social media that you personally know and have built up a relationship with. This pleasantly contradicts the repetitious advice that you need thousands of followers and friends to make an impact. In funding it seems quality outweighs quantity. Bill stresses that these 200-400 shouldn’t just be randoms you have blindly added or who have blindly added you. Nor should they be part of any list you have bought or created.
Instead they should be people who know something about you and who you know something about. Lets take that further and say you care about them and they care and lets call them your Superfans. It’s important that they care because when you are raising support you have to ask them for help. Bill says it’s amazing how taciturn people can become when raising funding. People can have hundreds of thousands of Twitter followers and still not send out a single tweet asking for support.
Well if you don’t ask you don’t get.
Have an unfair advantage over your competition and be able to articulate it
Whilst a community is one area that creates clout it’s ideal to have a few more. To use Bill’s terms you need to have an ‘unfair advantage’ over your competition. This can be a trademark, celebrity endorsement, viral media, or a signed big deal to name but a few.
Once you’ve got that you need to be able to articulate that clearly and concisely in a very attractive manner. You have to radiate your brand and business. Bill does a lot of Speed Funding nights (yep, that is what it sounds like. It’s like speed dating, but pitching for investment instead of dates) and he says that Angels reveal they are making their minds up when an entrepreneur is walking towards them and before they have even opened their mouths to speak. Transfer that to the fickle and fast world of the internet and you have about 3-5 seconds before a potential investor clicks off your pitch video. It’s therefore imperative to never do shoddy guerrilla videos, flung together in an afternoon on your iphone. Spend a bit of time and money on proper video production. Show your worth. Statistically when crowdfunding, people ignore the print and only consider the video.
The ideal length of a video is just under 2 minutes (1 minute 48 seconds to be precise) and anything threatening the 5 minute mark becomes either interminably long or has to be spectacular enough to hold attention and create conversation.
Now for something really interesting – if not a little controversial.
According to Bill, despite grossly lacking confidence, women are 2.2 times more likely to get funding than men when pitching Angels.
Bet that made you pause for a moment.
And there are valid and myriad reasons why. Firstly when crafting their investment needs men tend to think excessively and consider their costs approximately. In contrast women’s figures are born from sufficiency and they chisel their costs specifically. In addition women are more prepared to share their struggles and disclose more. Apparently Angels find this endearing and are inspired to assist. Men are apt to do the reverse and even inflate their position, which can give the Angels less reason to trust them. This does feel a little different to the cut throat world of BBC’s Dragons Den, but it does seem to fit the fact Angels’ secondary motivation for investing is social contribution (seen here https://www.phoenixfm.com/2013/12/19/is-there-really-any-money-out-there-funding-tips-from-bill-morrow-founder-of-angels-den-part-one/ ). Bill also advises you to have a sensible, but not swollen, business valuation ready.
Obviously this isn’t conclusive. Individual situations will vary and equally these theories will not be palatable to all. This is just Angels Den’s experience. At a minimum though, Bill advises that as well as being confident and knowledgeable you also be sociable, friendly and warm.
The final point worth considering is that there’s more than one way to fill your coffers. You can have a part crowdfunding package and part angel funded and it doesn’t matter what area of funding you secure first. The point is to start. If you have a business idea or project you are passionate about then polish that idea, polish yourself and then pitch it – and keep pitching it. Listen to feedback, adjust and review and keep going. You will never know until you present your idea where it will take you.
Bill Morrow www.angelsden.com
Information from a seminar conducted by Entrepreneurs In London www.entrepreneursinlondon.co.uk