Manna from Heaven--Finding Angel Funding

Technology companies trying to commercialize intellectual property struggle mightily with the funding question.  As Colorado attorneys for businesses from Boulder to Denver to Steamboat Springs, we feel duty bound to cut to the chase. Forget VC money unless you have (1) a Nobel laureate on board (2) a management team plucked from the upper echelons of successful large corporations or companies that sold for over $200 million in the last 3 years,  and (3) paying, recurring, profitable customers with no customer controlling more than 5% of your revenue. (Maybe we exaggerate on #1 but then again...).

So where do you find money? The natural progression is to use your own funds, then tap into friends and family through convertible promissory notes, then cast about for angel financing. How the devil do you find angels? If you know lots of rich folks, particularly rich business folks, you shouldn't need our help. For the rest of you, we are embarking on a series to help you find that angel financing.

First Rule:  Start Looking Long Before You Need Money

You can find a husband, wife or significant other faster online than you can find an angel investor. The mistake most startups make is not projecting how long the money they start with (or think they will have) will last.You will need money long before you think you do. And you will likely need more than you think you do.

The preferred amount of time is at least a year (which factors in procrastination, reality, and human nature). If you can perform miracles and spend every possible moment on fundraising, you might have three to six months. Note that this amount of time bears an inverse relationship to how fast your market is moving. Also, bad deals are made in haste, when a company is desperate.

If you are reading this and saying you need the money now, keep reading these periodic posts. You may be able to keep yourself afloat until you can find that manna from heaven, i.e. money from angels. And use our free checklist on What You Need to Get Angel Financing.