The biggest problem in startup funding right now is this: the shelf life of an angel investor is very short.
I believe the days when you would see angels building portfolios of 50+ investments are long gone. They will make a couple and then exit the market. But why?
Why angels make a couple of bets and leave
- Lack of liquidity
- Bad founder experiences
- No secondary market for exits
- Misaligned expectations and outcomes
- Overwhelmed by deal flow and opportunity
- Every VC and their dog is now targeting £25k tickets
Who to target instead
So what can you do about this?
- Stop targeting anyone with "angel investor" in their bio.
- Focus on high net worth income (the UK financial regulator defines this as £150k+ per year).
- Target sector-specific C-level and above.
- Focus on winning small ticket investments.
- Raise only what you need, not "as much as you can".
- Be open to partnerships and collaboration.
- Build a transparent investor community in your business.
Zig when others zag
Understanding market conditions is critical to raising funding successfully in 2024. The number of rounds per year is decreasing, as is the volume of cash flowing into startups.
You have to zig when others zag.