Jack PorterSerial Entrepreneur - Angel Investor - Mentor

I am an 8 time Founder with 6 successful acquisitions and 2 IPOs. I run a startup accelerator and have extensive experience in raising investments from Angel Investors and Venture Capital. I have raised over $500M in Angel Investment, Venture Capital, Private Equity, and Public Equity.

I also work with great entrepreneurs on launch with a strong background in landing page optimization, customer acquisition, conversion funnel optimization, and analytics.

Recent Answers

AngelList Syndicates are now a way to get into very hard deals as well. Top advisors will syndicate a round into great company. As an angel investor, you come in on the coattails of these advisors and you will get in on rounds that you probably could not get into otherwise.

The key on AngelList is to be either Featured or Trend. Featured companies are specifically chosen by a group of advisors to AngelList. About the only way to get this done is to know one of the people in the group. Most of these guys are easy to meet, but this is key.

Trending requires you to run a "blitz" on AngelList. AngelList measures Trending companies as the ones that have the most activity from Sunday to Sunday. Companies that Trend run a very coordinated campaign to get people to follow, ask for information, and invest all in a 7 day period. You will probably need more the 100 people to do this to trend.

It is also very important to have a great profile, a really strong Referrer, and be very good at responding to the investors.

Most startups will raise a $300K Convertible Note first and then close in a $1M Series Seed Round. The Convertible Note is usually raised in an Advisory Round where a few investors engage, advise on the investment strategy, and help you close the round.

Before you try and close the $1M Series Seed Equity Round, you will want to have your core team built, your product at Product/Market Fit, and your conversion funnel optimized (sales funnel if you are using direct sales).

On average, deals in Silicon Valley are getting valuations of $4M-$6M Pre-Money. In second-tier cities like NYC, Austin, Boston, there is about a 20% discount and the rest of the country about a 40%. Valuations at the seed round pre-revenue are based on 3 factors: how complete and season is the team, how close to Product/Market Fit is the product, and what kind of customer validation has been captured.

Beyond that it is just negotiations. Founders should raise money at the "Upper end of normal". It is very easy to get burned by closing a seed round at a high valuation and then getting highly diluted in the Series A because the valuation did not hold up and you have to do a down round.

Go for $6M and make sure your company has the milestones reached to sustain it.

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