Subtitle: The deals chase the money. The money doesn’t chase the deals.
Two days ago in Angels vs. VCs on Business Pitches I said our angel investment group looks at all submissions.
That confused my friend Anthony Richardson, who followed up yesterday with this question:
Should an early stage company bombard every online submission under the sun ? It has always been my advice to clients to tell them that it was a complete waste of time, and if I may be honest here; I was fairly surprised to see that you thought differently.
Anthony, I completely agree with what you’ve been telling your clients. An early stage company should definitely not bombard every online submission under the sun. That is, exactly as you suggest, a complete waste of time.
(Aside: misunderstandings are always the writer’s fault, never the reader’s.)
My reference to submissions was very specific. We use angelsoft.net, which is free to entrepreneurs and angel investors, and is used by about 400 other angel investors.
We would never consider investing in a company without getting to know the people personally. Our review process first narrows them down to about a dozen or so, using mainly the executive summaries. From there we break into teams, visit their offices, talk to their customers, and study their business plans (the buzzword is due diligence) before we make our decision.
I like angelsoft.net because it’s practical, it works, it collects and manages the information, and it’s free for both sides of the table. And several hundred angel groups use it like we do. It’s free for entrepreneurs and angel investors.
But submitting to us through angelsoft.net is not just submitting online. While it may be possible to use it to submit to lots of groups, that won’t work. Almost every group that uses it has its specific criteria. For example, our group looks only at Oregon companies. We’ve made a couple of exceptions for companies in Southern Washington wanting to move, but neither of them won.
Angelsoft.net does allow what it calls “bulk” submissions, meaning subsmissions to multiple groups. We don’t look at them unless they’re in Oregon. I doubt that other groups look at submissions outside their criteria either.
I’ve been watching online business plan posting sites since I finished the first Business Plan Pro in 1995. My company owns one of them, secureplan.com, but only as a convenience to our software users. It lets them post a plan online instead of printing it. Investors don’t browse it; they need an owner’s specific login information for each plan they see. And we don’t charge for it.
Seriously: real investors don’t browse the web business plan posting sites.
Those sites that charge you money to get listed where investors will find you? Assume that’s a complete waste of time and money. No, I don’t know them all. Things do change. In 15 years I’ve heard of one single deal that started with an online listing. I’ve heard serious investors have concerns about deal flow, but that doesn’t mean they’re browsing business plan posting sites.
If you’re serious about getting investment, do it right. Choose your targets very carefully. Look for close matches between what you have and what they want. Shotgun scattering will never work.
I completely agree with you Tim! Our VANTEC angel group is a network of angel groups and funds that will only look at deals if there is a fit with their specific criteria. Geography and industry sectors are our first “screening”. We will pass on using any more of our resources to pursue due diligence on deals that don’t “fit” our initial criteria.
Good advice for those of us looking for investors.