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April 10, 2007

Raising Angel Money

Def:  Angel - a person who invests money in start-up companies.  They may or may not help the entrepreneur ultimately succeed.  They are often seen as a stepping stone to raising money from venture capitalists.

I get a lot of questions from entrepreneurs asking me about whether they should raise angel money and how to do it.  While I've done it, I only did it once and I can hardly take credit for how well it went.  One of my angels was Bill Payne (still is in fact) and he has done the entrepreneur community a great service by writing an eBook about raising angel money.  He gave me a copy of the book and it is wonderful.  It's called "The Definitive Guide to Raising Money from Angel Investors" but it could have the subtitle of "Things you need to know, but don't even know to ask" or "What no one will tell you about the realities of raising money for your start-up."

I would recommend the eBook even if you don't think you are going to raise money and that you buy this book because there is a lot in it that applies to any start up regardless of whether you raise money or bootstrap.

Bill was on my board of directors for many years and he invested in my company, so I shouldn't have been surprised by how honestly he speaks in this book.  He once told me when we were looking for capital, "I know where you can get a million dollars with very little effort and no cost."  I fell for it - "Where?"  "Do a better job of collecting your accounts receivable!"

I can't think of a question about raising money that I've heard that isn't answered in Bill's eBook.  Bill has been a very, very successful entrepreneur and angel investor.  You can buy his book for $37 at www.billpayne.com and save yourself a lot of time and energy trying to learn the lessons the hard way.  From now on when I get a question about raising angel money, I'm going to ask, "Have you read Bill Payne's eBook?"

Disclaimer:  Bill was on my board, he's still a stock holder in my company and he's a very good friend.  That said, I wouldn't recommend his book if I didn't think it was worth many times the price.  I do not get a commission or anything else other than the satisfaction of knowing that maybe a few entrepreneurs won't have to learn this stuff the hard way.  Don't take my word for it though - Brad Feld has also recommended it.

April 10, 2007 in Entrepreneurship | Permalink

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