Here are the 6 things companies need to do in this altered financing environment to survive and raise angel funding:
1. Bootstrap
Companies must pinch every dollar, when possible. Get individual contributors to work for free, pay upon performance and do everything you can that does not cost real money. Work from home, barter, use stock, and look for services and/or consulting revenue to help build the product.
2. Focused
This means only ONE market niche as the initial target. Startups need to be a small fish in a small pond.
3. Cash Breakeven in 6-12 months maximum
Tune your plan to get to cash breakeven in 6-12 months on no more than $1 million first round investment.
4. Use video to tell your story
You don’t need to spend any money doing this. Record yourself giving your pitch and providing answers to all the typical questions that you get from outsiders and post it on YouTube. Your passion, conviction, and knowledge of the problem you are solving will come across in ways that a deck can never achieve and by presenting your own Q&A, you’ll skip all the typical questions and have a much more constructive meeting when you get on a call with an investor.
5. Network and learn
Attend entrepreneurial workshops regularly. This helps you to learn how to run business models better and see how investors react to holes in plans etc.
6. Get a mentor
You cannot afford to learn by trial and error here. Typically, you need someone available for at least two to four hours every week to review all major decisions. This will be the best time and money you will ever spend. An hour or two a month will save you tens or even hundreds of thousands of dollars in errors, can generate sales faster, and will get you to critical milestones months earlier.
Doing all of these things can boost your chances of creating a profitable business and securing angel funding from one 1 in 1000’s to as high as 50%.