What are great funding sources for startup at micro-revenue stage?

April 6th, 2015

Would appreciate any general insights besides angel list and friends/fam. Thanks

Jessica Alter Entrepreneur & Advisor

April 6th, 2015

The reason you don't see a community of investors just willy nilly available to be contacted is because there isn't one and there isn't one because they don't want to be contacted that way. Investing (and relationships in general) works off social proof. Good investors don't want to weed through every random person that contacts them. They want someone to say "hey, I believe in this person" or "I think this one is interesting for you to talk with." The second link rachel posted reiterates that. You've got to hustle to find people you have a connection with or find ways to make connections.

Chris Carruth VP/Director. Strategy | Business Development | Operations | Product | Solutions

April 6th, 2015

Even with a great story, great team, great product, great niche, etc getting someone to invest, pre-revenue, is extremely hard. The types of stereotypical angel investors who are willing to take a chance on an unproven product with an unproven team, no matter how great the idea, don't really exist anymore, at least in my experience. Those types got burned in the late 90s and it left a very bitter taste which even today lingers.

There are exceptions, but IMHO you have to be "sponsored" to get inside the personal networks of HNWIs who might be willing to throw $25K - $100k into a new ventures when there is no proof of traction.

Onikepe Adegbola, MD PhD

April 8th, 2015

Another source of funding is state funding. If you are in NYC, for example, look for funding provided by NYC or NY state to startups. Also look into Comcast's minority entrepreneur accelerator program (not sure if it is still ongoing). William Crowder, who is Managing Partner, DreamIt Access, is also a good contact.

Good luck!

Kodjo Hounnake

April 6th, 2015

Rachel - perhaps I should have elaborated a little more, otherwise my post would easily be misconstrued as having not done any prior research on the topic. I've done a lot of research on this and I did see the links you sent across prior to posting my question.

I just haven't seen a community of investors yet (other than accelerators/incubators) who make themselves available to be contacted and who screen through early-stage revenue startups for investment opportunities. I am not looking for personal intros. But rather for communities of high net worth individuals (ex founders themselves perhaps) who have the same level of sophistication as accelerators/incubators/established angels

Hope I was able to clarify a bit more

Mir H

April 6th, 2015

usually angel investors...but if you have a great business idea with a promising team, and a compelling product, you can approach VCs in that space. PickUpLater, it seems, is among many of these order online and delivery model includding Google. Did you do a market analysis for NYC and nationally?

Joe Monastiero CEO, Founder nFlate

April 6th, 2015

I recommend that everyone keeps their eye on the equity crowdfunding movement. The latest iteration of the JOBS Act (IV) is going to allow non-accredited investors to begin investing in companies using crowdfunding platforms (not just crowdfunding, but I believe that is where 95% of the capital will flow). This could begin to happen in as little as 60 days.

It is possible, maybe even likely, that a circus environment will be created by this law, allowing every startup leader to become a PT Barnum type and pitch their deal loudly in an attempt to be heard over others. But savvy business leaders will find a way to rise above the noise and present high quality deals to the non-accredited in a way that resonates with them.

Today, you need a lead to get a pack of followers. Generally, that lead needs to have name value or a group of followers (kinda the same thing). An angel lead that can create momentum will put in $50k-$100k. The only way, IMHO, to get that today is to have a great story in a great market with a great team and compelling early traction. IF you have this (or will have it very soon), then you have to tell the story over and over again to people that are willing to listen. Practice makes perfect (however, it cannot solve missing pieces of the puzzle).

Benjamin Olding Co-founder, Board Member at Jana

April 7th, 2015

The only exception I know to what Jessica posted is http://kimaventures.com, where you can apply online & actually get a funding decision (usually "no thank you") pretty quickly. They are the exception and I know nothing else about them, good or bad; just know about them because it's so unusual.

As you mention, incubators sometimes have an investment component, as do business plan competitions.

I think everyone's experience (entrepreneur & investors) is that it's better to meet people informally and build a network of supporters yourself over time. There's not really a wide-open free-for-all you can just submit on line to pitch to because it's not really a great idea. There is real value to learning how to fundraise - it's not a waste of your time, though I appreciate it can seem orthogonal to operational goals at times. Commit to doing this the right way or partner with a cofounder who has.

Rachel Zheng Business Development Manager at Honyee Media

April 6th, 2015

There are tons of good discussions on this already. Doing a search before you post is super helpful. Here's two helpful examples http://members.founderdating.com/discuss/topic/Fundraising and http://members.founderdating.com/discuss/1899/How-do-you-start-raising-a-seed-round-when-you-don-t-have-a-vast-investor-network

Lawrence Lerner Digitalization and Transformation Coach

April 12th, 2015

Take a look at LighterCapital and Community Sourced Capital in Seattle. They work at smaller amounts and look for a plan and solid management over longer running companies.

Paul O'Brien

April 6th, 2015

I wrote this some time ago and it remains a popular topic: How are startups getting funded without revenue

Bottom line and food for thought, don't say micro-revenue which suggests you are getting micro transactions in a revenue stage startup moving from micro-revenue into another form of monetization. Where you source funding depends on your team, vision, opportunity, and traction. Traction is last. Revenue is related to traction and it's last because revenue really only serves to convince investors who neither have confidence in the first three things NOR confidence that your market share validates that you can make money. Thus, having failed those first points, having revenue determines if you can service debt or an investor who behaves like a source of debt (capital expecting to be repaid).

The laundry list of sources is extensive from friends and family or kickstarter to private equity and corporate investment. Where you seek funding depends on why your capable of securing that funding so back up and start there... tell us about your team, the vision, and the opportunity so your business can align with the source of capital appropriate to that.

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