How to Broaden Your Search for the Right Investors

two people making money deal

If you’re part of an accelerator or startup, the SEC just granted you a new way to approach funding in 2014: the right to solicit a broader range of investors.

I wouldn’t jump the gun on this opportunity too quickly, though — there’s a bit of fine print to read first. For one thing, the new, relaxed rules on “general solicitation” are subject to change.

What You Need to Know About This SEC Change

In response to the JOBS Act, the SEC is now allowing startups to advertise their stock to investors. Many people believe this gives companies free rein to go after money — an assumption fueled by crowdfunding platforms like Kickstarter and Indiegogo.

In reality, you and your legal team have to take more precautions to ensure the buyers are accredited, which essentially means that they’re financially capable and know what they’re doing. If you don’t know a buyer, you must do the appropriate research to confirm the investor is accredited.

Besides researching the legality of an investor, startups and accelerators also have to work on their marketing strategies. To fully enjoy this new opportunity, founders must know how to attract the right investors and then reel them in with the right pitch.

Marketing to Investors

Here are three marketing tactics to help you find the right investors.

  1. Leverage the power of social networks. LinkedIn is a great place to start looking for potential investors. Try posting enticing information or even direct messaging some of your connections.
  2. Look into crowdfunding websites. Crowdfunding websites curate and position business concepts to a community of potential investors. If an investor is interested, his contact information is passed on to the startup. Research the crowdfunding sites that fit your industry best.
  3. Utilize community events. Community and public events are excellent ways to solicit interest in an exciting business opportunity. By getting exposure at contests, trade events, and other public displays, you can generate investor curiosity.

Pitching to a New Audience

Once you’ve garnered investor interest, the next step is creating the right pitch. Historically, pitch decks were targeted at investors who knew the company well. When marketing to a more general audience, you must work with a different set of assumptions.

Not all investors will understand the business, let alone the market opportunity. The pitch has to be broadened, well-supported, and designed to attract the right potential partner. Think of it as fishing: In a small pond with fewer species, you know exactly which type of bait to use. With a huge lake, you’re making an educated guess.

Crafting Your Pitch

To give you more than a shot in the dark, here are some guidelines to craft a successful pitch.

  • Clearly show the potential for return. Investors are interested in how an investment can mature, earn a profit, and get them a nice multiple on exit. Explain how scalable the opportunity is, the size of your market, and how disruptive the product or service will be to this market. Most importantly, clearly explain how you plan to earn revenue.
  • Don’t get caught up in “how it works.” Many entrepreneurs get caught up in the technical details when pitching their business ideas, but investors don’t care nearly as much about how something works as they do about the potential impact it will have on the market. 
  • Ensure you’re pitching the right investor. The wrong partners can be toxic. As you discuss your business idea with investors, consider whether or not they’re a good fit for your startup. Just because they have money doesn’t mean they’ll make good partners. (This goes beyond ensuring investors meet the criteria in the regulations.)

In addition to the guidelines above, the key is giving the investor confidence that you haven’t invented the numbers or the market opportunity. You want to convey that your prospects are very real in a way the investor can understand.

These newly relaxed rules don’t give you carte blanche, but by doing your homework, marketing to the right investors, and carefully considering each prospect, they could create a great opportunity for your business.

Alex Friedman is the co-founder and president of Ruckus [], a full-service agency, tech partner, and accelerator that is devoted to helping businesses grow. At Ruckus, Alex has been at the forefront of developing technology for nearly a decade, advising entrepreneurs and growing brands and Fortune clients alike.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

4 Things Every Founder Should Know Before Your Investor Meeting


Please Sir, I beg you.  Don't do this.

In a previous piece, I discussed what early stage entrepreneurs needed to know in order to secure angel investment attention in 2014. For the fortunate few who were successful in landing a coveted “yes” to taking an actual meeting, there is usually little time left to prepare for the most important part of the funding process – the investor presentation. This is the first true opportunity for startups to provide an in-depth narrative and discuss financial expectations with an interested investor.

Fortunately, many entrepreneurs have already gone down this path and know that balancing the everyday role of running a startup and finding the time to prepare for investor meetings doesn’t have to be a constant struggle. Consider the four following ways to make sure you don’t lose investor attention now that you’ve got it and enter the negotiating room as prepared as possible.

incontent3Have a Command of the Facts

Now that you’ve managed to spark the interest of an investor after what was probably a brief initial encounter, preparing for the subsequent in-depth meeting is a much more intense experience. You must be prepared to speak in depth to every aspect of your venture—management’s experience, go-to-market strategies, competitive landscape, etc. Don’t guess; when asked a question to which you don’t know the answer, it’s better to acknowledge the quality of the question and tell the prospective investor that you would like further time to consider the question and that you will provide your answer in a follow-up email or phone call. Furthermore, don’t be defensive, because you will come off as someone with whom it would be difficult for the angel investor to work. Instead, recognize the questions for what they are; namely, not objections to you, your thinking, or the venture, but simply probes to learn

whether your venture meets the individual’s or group’s investment criteria.

Don’t shy away from your failures

It might seem like discussing past failures of the founder or its management team would reflect poorly on the startup and therefore should be avoided, but that is actually the opposite of what is likely to impress a potential investor. Instead, be prepared to discuss previous failures and what was learned from them; an experienced investor will have done his/her homework and know about them anyway so be upfront and use it to your advantage.

What kept you up night after night asking questions and vowing never to do again? How have your failures shaped your strategies for your current venture? An investor wants to be certain that if a financial relationship does result from the meeting, the founder and team are prepared to receive constructive criticism and learn from past mistakes. The ability to navigate uncomfortable situations and withstand scrutiny from an investor or group of investors demonstrates the startup’s capacity to handle the inevitable pressures that will result from running the business.

6559 (1)

Be realistic about the money

It’s easy to “spend” another person’s money. Don’t fall into the trap of thinking that the amount you are looking for is a pittance to the investor because of his/her wealth. Investors worked hard for their financial comfort, and they are likely to guard it preciously. The investors with whom you will be speaking have allocated a certain amount of their wealth to early stage investments, but from among the investment opportunities within that asset class they’ll favor the ventures that, all other factors being equal, offer the largest potential reward for the least amount of risk.

That means that you must establish a realistic and defensible pre-money valuation (“PMV”) or current value for your venture. Set it unrealistically high, and the investor is likely to screen you out both because the PMV would not yield the investor enough ownership to meet his/her return expectations and because by doing so you’ll have shined a bright light on your inexperience, unreasonableness, or arrogance.

Setting your PMV is an essential exercise in searching for equity investment. Do your research— what value have other companies in your space and geographic region recently sustained in their financings? Early stage venture attorneys in your area may be able to help you answer this question. There are also online tools like Worthworm to assist you with this exercise. Avail yourself of all of the tools and information available to you to set your value, because even like the best public stock, your investment opportunity will only be attractive at the “right” price.

Have clear go-to market and growth strategies

An investor is going to want to understand in very real and clear terms how you plan to reach your target audience and how that will scale over time. Be prepared to discuss revenue plans and business models, and to defend your decision for each. Create a narrative that proves why your venture is worth the current asking price and how that worth will continue to grow at an attractive pace.

The true tests of the validity of your strategies lies in customer acceptance and growth in your venture’s value. With respect to the former, do all that you can to show early sales, i.e., customer validation, and be prepared to discuss what you’ve learned from these customers. With respect to the latter, recognize that as an entrepreneur among your highest responsibilities is to implement strategies that will grow the value of your company, and by extension the value of an investor’s ownership in your company, to its highest points at the quickest pace. Ensure that you can articulate how you intend to build the company’s value quickly and consistently toward an exit event that will yield your investors their target rates of return.

Leading a startup team is a risky move. Thousands upon thousands of startups are seeking startup capital from a relatively limited number of investors. If a great idea does spark the interest of a potential investor, use the investor presentation as an opportunity not to extoll how great your idea is, but how prepared you and your team are to execute the idea and grow it into a highly valuable business.

Alan Lobock is the co-founder of Worthworm ( and SkyMall. Having been on both sides of the start-up investment scene– seeking investment for his ventures and as an angel investor himself, Alan launched Worthworm to solve one of the biggest challenges young companies and their prospective investors face—how to compute a credible and defensible PMV for an early stage venture seeking angel investment.

4 Simple Reasons Every Startup Should Bootstrap


greenpalCEOLast year, three friends and I decided to make the plunge and embark onto the journey of building our tech startup GreenPal. At the time, none of us knew how to code or design a product. The only strengths we really had were a great idea and strong work ethic.

Over the course of a year’s time, two of my cofounders taught themselves how to code; one taught himself Photoshop, and I learned a full stack of digital marketing skills. We knew that we would need to become a dynamic self-sustaining team because we simply couldn’t afford to outsource any of these needs; we were bootstrapping our way through our journey.

Bootstrapping may not be feasible for some startups. I believe it will depend on the product idea, its complexity and development difficulty, and its founders’ personal life situation. Needless to say, it’s much easier for two young hackers in their mid-twenties without kids or house payments to bootstrap compared to founders in their thirties who might be have these obligations to service while starting their company.

With that being said, I am a still a proponent that in most cases, tech startups should bootstrap (funding the company out the founder’s pockets) for as long as absolutely possible. My reasoning is based on several principles:


A lack of capital forces efficiency. This forced function requires a startup to make small, meaningful experiments with their own money. A startup burning their own cash will make smarter bets and will measure the outcomes of these bets intensively. Return on investment from the implementation of a new feature, or your Google Adwords spend, and the ROI of outsourced talent for example, will be under a more intense scrutiny when the founders’ cash is being burned. In a startup, capital preservation and measurement of everything, every decision and every expenditure is critical. Scarcity forces these not-so- fun disciplines.

Pain, Sacrifice, and Commitment:

It’s uninspiring to see an entrepreneur burn all of his angel money on a pipe dream. He might have made tighter, more thoughtful decisions and measured his progress better if he had been burning his own cash along the way. Especially in the beginning, when it’s their money, they will make more sacrifices, put in longer hours, put in work on Saturdays and maybe even Sundays when it’s their chips on the table.

When inventing a product an entrepreneur must build quickly and cheaply, measure, and learn. This takes endless hours of commitment. When it’s their money, they will be more inclined to make the sacrifices to commit the time. Time is the blunt object that an entrepreneur can use to break down the walls that stand in the way of your success.

Validated Learning and Team Growth:

With constrained resources (the startups’ own money) they will be forced to do everything themselves, and that’s good because it’s the only way to learn. Alternatively, when funded by outside investor money, the team might be tempted to outsource needs like design, development, SEO, sales etc. When the team is forced to self-execute these disciplines, the start up will grow in that process, creating a group of ruthless warriors that can and will do anything to succeed.

Once entrepreneurs start scaling their team, founders can say, “I’ll never ask you to do anything I haven’t done myself.” More importantly, the team will know what kind of potential team-mates they are looking for. It is infinitely easier to make a solid hire when the core team is proficient in the skill sets that candidates will need to have.


Dilution and Control:

Lastly, when a startup defers seed capital as long as absolutely possible (or ever at all); they preserve their most valuable asset, their founder equity. Challenging the team to defer outside capital and establish traction and problem market fit on its own dime, and challenging the team to monetize day one will allow it to raise funds further down the road at a much higher valuation and less founder equity dilution. The team will also preserve more control. Some angel investors are helpful, but sometimes they can be illogical and overbearing. Bootstrapping ensures the team can side step this potential headache and distraction.

Raising angel/seed capital is relatively easy. With a smart team, a good idea, and a big market, there will have no problem raising angel/seed capital. The reality is, that sometimes, I observe teams burn a year, along with a substantial sum of seed money, and the only progress is the validated leaning that the co-founders have acquired in that time. Unfortunately, in many instances that same learning could have been acquired bootstrapping along that while way. Yes it’s tougher, and a lot less fun, but it makes for a stronger foundation and a team that owns more of their company.

Lastly, I will share a quotation I read on Paul Gram’s blog that I feel embodies bootstrapping: “The best way to do something ‘lean’ is to gather a tight group of people, give them very little money, and very little time.”- Bob Klein, chief engineer of the F-14 program.

Bryan Clayton is a serial entrepreneur and co-founder of GreenPal

Here’s How To Know If A Startup is Really Ready for Investment



From Steve BlankNibzNotes40

Since 2005 startup accelerators have provided cohorts of startups with mentoring, pitch practice and product focus. However, accelerator Demo Days are a combination of graduation ceremony and pitch contest, with the uncomfortable feel of a swimsuit competition. Other than “I’ll know it when I see it”, there’s no formal way for an investor attending Demo Day to assess project maturity or quantify risks. Other than measuring engineering progress, there’s no standard language to communicate progress.

Corporations running internal incubators face many of the same selection issues as startup investors, plus they must grapple with the issues of integrating new ideas into existing P&L-driven functions or business units.


10 Fundraising Mistakes You’re Probably Making






From Sam AltmanNibzNotes38

There’s a lot written about what you should do when you raise money, but there hasn’t been as much written about the common mistakes founders make. Here is a list of mistakes I often see:

• Over-optimizing the process

A lot of founders try to get way too fancy with tricks that they think will help them raise money.  It’s actually quite simple; if you have a good company, you will probably be able to raise money.  You’re better off working to make you company better than working on fundraising jiu jitsu.


Turns Out Location Doesn’t Matter When Raising a Series A



From Tomasz TunguzNibzNotes35

Great entrepreneurs can come from anywhere. But do the locations of startups affect their ability to raise follow on capital? Do seed stage companies in the Bay Area face lower likelihoods of raising a Series A because of more competition? Or is it that New York based startups, because of a smaller ecosystem, face more difficulty?

Using Crunchbase data, I charted the financing follow-on rates across the 12 US cities in which at least 10 seeds, 3 Series As and 3 Series Bs have occured in the Crunchbase data set from 2005-2014. The first two charts below contrast the success rates of post-seed startups raising an A having raised a seed and raising a B having raised an A. The third chart shows the success rates of raising a B having raised a seed round.


Paul Singh’s Disruption Corporation Solves the Series A Crunch With Data


disruption vc

So much has been written about the Series A crunch. Lower costs of starting up, more streamlined avenues for disruption, and a general sense of optimism about the future of startups has led to increased funding in the early stages of a company. For better or worse, the trend has created more than a few startup orphans between the seed round and Series A.

rsz_incontentad2Paul Singh thinks it’s worse.

“There’s a funding gap between the Seed round and the Series A — and it seems to be getting wider,” he wrote in a blog post yesterday. “Rather than writing it off as the “Series A Crunch,” I believe the investors that can systematically identify the most promising companies are positioned for great returns.”

As a partner at 500 Startups, Singh knows first hand about making tons of seed round deals. But he saw opportunity between the seed round and the Series A. Not every company is ready for a full Series A when they run out of money, but that doesn’t mean they’re doomed to failure yet.

Singh left 500 Startups in the spring of last year and launched, which spawned The data product tracks “indicators” for different companies to give entrepreneurs and investors an idea of how those companies are performing.

Evolving into a fund seemed like the natural next step for Singh. He believes the market is now less about “deal sourcing” and more about “deal selection,” but how do you pick the winners when there’s so much noise around startups these days?

“We’re going to use our own data, tools and research to make fewer wrong decisions about the companies we’re considering for investment,” he said.

VC investing used to be about trusting your instincts and knowing a good deal when you see it. But, with the explosion of data products–including the one created by Singh’s Disruption Corporation–it seems it’s time for VC to catch up with the rest of us.

The Crystal Tech Fund will focus on that sweet spot between the $50k seed round and the $5 million Series A. They’re looking to select companies that have achieved some level of product-market fit, and revenue would make the deal that much sweeter.

Find out more about the Crystal Tech Fund here.

How to Know Which “Exit Strategy” Investors Want to Hear


From Shockwave Innovation

You’ve just completed a great investor pitch with heads nodding and good interaction.  You’re about to ask “Does this opportunity interest you enough to explore an investment?” when instead you get a final question:


“One final question.  What is your exit strategy?”.

Oops, the last two times you got this question you were met with a sour look.  The first time you wanted to show you aren’t looking for a quick-flip and so you answered something like, “We’re not even thinking about selling the company or doing anything crazy like an IPO”.

The next time you decided to show the investor you want everyone to get a payday and so you answered something like, “We’ve already identified six companies that surely will want to acquire us as soon as we’ve reached $5M in revenue.  They are A, B, C, D, E and F”.  In this blog post I’ll explain why you got the sour looks and suggest a different response that aligns nicely with both company and investor interests.


8 Tips You Should Read Before Raising A Seed Round



Minutes before the first meeting of my startup’s seed round, a wise advisor pulled me aside. “This is going to be wild,” he warned, with a knowing smile. “Brace yourself.”

Several months later, after raising $850,000 for my startup, ReelGenie, the ride has stopped (for now). I hopped off the fundraising roller coaster with memories of unexpected thrills, a few bruises, and many lessons for the future.

rsz_incontentad2Here are eight things that I know now that I wish I’d known then:  

  1. Network like there’s no tomorrow. You never know where you’ll meet a future investor. ReelGenie’s investors include professors of mine from years ago, former co-workers, and individuals who I met at an event and loved spending time with. Put yourself out there. Unless you’re already rich and/or famous — and if you’re reading this article, that’s probably not the case —investors won’t just flock to you.
  2. Cast a wide net, smartly. Most people you talk to will say no. So play the numbers game. The more potential investors you speak with, the higher your chances of success. But I say that with two caveats. First, do some homework so you’re targeting people who are likely to love your deal, rather than wasting time with those who won’t. Second, stay organized. Keep track of every communication you make. If you can’t convince an investor that you’re equipped to handle fundraising, good luck convincing them you can run a company.
  3. Seek out points of validation. If I never hear the phrase herd mentality again, I’ll be a very happy man. But the reality is that’s how fundraising works. Investors don’t want to be alone if the ship sinks. Lock down a few smart investors early. Get early adopters and evangelists for your funding, just like you do for your product or service. And find a lead investor. He or she doesn’t have to put in the most money, but a respected investor running the process will give others more confidence in your deal and help speed things up.
  4. Find investors who can do more than just write a check. Chances are you’re relatively inexperienced and going up against competitors with deeper pockets. So how do you tip the scales in your favor? Use the fundraising process to find helpful advisors. The best investors are those who can give you strategic guidance, make introductions, and write a big check (today and in your future rounds). Not all investors are good for your company. This is especially true in the current environment of the Series A crunch. Plan a few steps ahead. Your fundraising goal should be to find long-term partners, not a short-term cash infusion.
  5. Valuation is what the market will bear. Just because your friend raised $5 million at a $15 million pre-money valuation doesn’t mean that you should too. Investors are willing to pay what they think the company’s worth, so don’t set yourself up for disappointment. Securing ample funding for your company should be a higher priority than your dilution. With that said, shop around. Don’t accept the first offer. The earlier you start fundraising and the less desperate you seem, the better your chances of getting multiple bids — and a valuation you’ll be excited about.
  6. Don’t let fundraising take over your business (or your life). As the CEO of a company, your first priority is running the company. It’s not rocket science, but it’s hard to keep that perspective when fundraising season rolls around. The emotional strain is inevitable. One day you’re riding high off a great meeting, the next day you‘re sadly marveling at how many different ways someone can tell you no. It’s important to put your blinders on. Set aside time for fundraising each day. If you do, you will get things done. Finding customers and motivating your employees will come more easily. As your metrics improve, so will your odds of raising money and your valuation.
  7. You can raise money outside of Silicon Valley. Most of our investors are on the opposite side of the country, in Washington, D.C. Listening to entrepreneurs, you’d think raising capital is harder than getting a bill through Congress. It’s not. As Tech Cocktail recently reported, the D.C. angel scene is alive and well. And there’s money to be found in your city, too. You don’t need to move to the Valley. But you do need to be tenacious in networking (see #1) and understand what investors in your area are looking for. Tailor your pitch to your environment. And if that doesn’t work, hop on a train or a bus to meet with investors in other cities. Now more than ever, capital is mobile. You should be too.
  8. Say “Thank you.” A lot. One of my favorite books is Robert Fulghum’s All I Really Need to Know I Learned in Kindergarten. Twenty-five years (and two degrees) after I graduated kindergarten, it’s amazing how the simple lessons of life haven’t changed. Remember, investors are deciding whether to give you money. A great business plan is worth less if you’re a jerk. So be thoughtful. Say thank you when someone makes an introduction or takes a meeting. Follow up. Be a giver, not a taker (and read Adam Grant’s fascinating new book to learn what that means). Put a personal touch on every call or email. By simply being polite and respectful, you’ll give yourself a leg up in fundraising, if not in all aspects of your business.

David Adelman is the Founder and CEO of ReelGenie, an online platform that revolutionizes the way stories are told and shared. David is also Founder and CEO of Reel Tributes, the premier producer of high-end documentary films. Reel Tributes’ films preserve timeless stories and memories for families and family-owned businesses.

The Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.

How to Raise Money Without Asking



From Ben Yoskovitz, Instigator Blog

When you start raising money for your startup, people will tell you, “If you want advice, ask for money. If you want money, ask for advice.” You might dismiss this as generic, cookie-cutter advice, but there’s definitely some truth to it, particularly the second part.

If you want money, ask for advice.NibzNotes10

Recently, I was in touch with three entrepreneurs (two via the phone, one via email), and in all three cases they wanted to give me an update and ask me some questions. All three are fundraising. None of them asked for money.

Maybe they don’t want my money. Maybe they don’t know I’m an investor (which seems unlikely). Or maybe they’re leveraging a little psychology to their advantage.

After each of the interactions, I thought about the startups and entrepreneurs for a few days. The updates were all positive (although they openly talked about outstanding issues too, they’re not being dishonest about things), and that positivity grew inside my brain over time. I was left…wanting more…




How to Know When to Raise VC Money


 Four seasons in Japan

From Tomasz Tunguz, Redpoint Ventures

Aside from a startup’s internal considerations about the right time to raise money, founders should weigh the seasonality of the fund raising market when planning their


raise. There’s a rule of thumb batted around the valley that the worst times to raise capital are in the dog-days of summer and after Thanksgiving. As it turns out, this
aphorism is only a half-truth.

Below is a chart of the dollars VCs have invested by month of year. I’m using Crunchbase data since 2005 for tech companies in the US. There are a few notable trends in the data.

First, the impact of the summer is evident. The slowest month for investments during the year September. I’d estimate there are a few weeks latency in the data between when the investment commitment is made and the investment is disclosed. The legal diligence process of about 3-4 weeks that typically follows signing a term sheet introduces this lag.



Mobile Startups Raise $3.8B in VC Financing in 2013



Q3 of 2013 posted the largest quarter in financing for the mobile sector ever, CB Insights reported this week. Venture capitalists invested $1.12 billion dollars across 150 deals in that quarter, and Q4 didn’t see a significant decrease in investment. Across all 4 quarters of 2013, VCs poured $3.8 billion dollars into the mobile industry.

That money isn’t just going to finance the next consumer app, either. (Though $190 million did go to consumer apps.) With 2013 being the year we all woke up to Internet threats, startups working on security took the largest portion of that funding (10%). Travel was the next hottest sub-industry, but the money spreads out a good bit after that. Payments, customer relationship management, and business intelligence/analytics were all sub-industries that pulled in big VC money last year.

Unfortunately, the money wasn’t as spread out over geography as it was over industries. San Francisco, Palo Alto, and Mountain View pulled in a combined $1.36 billion dollars. The next closest region was New York/Brooklyn with a combined $269 million.

What does this mean for startups everywhere else? Well, obviously, there’s money to be had out there. With some projections placing smartphone sales in the billions this year, and fewer companies than we thought going mobile first, it’s safe to say the market isn’t going anywhere.

Companies dealing in mobile security will probably still be attractive to investors in 2014. After all, black hat hackers and the NSA aren’t going anywhere.

Check out the whole report from CB Insights here.


20 Most Active Seed Investors Outside Silicon Valley


We all know the names that come up when we talk about the most active early stage investors: 500 Startups and Andreesen Horowitz.

However, when CB Insights released their list of the 150 most active seed investors of 2013 earlier this month, we couldn’t help but notice than an awful lot of the top funds were outside of Silicon Valley. Perhaps this is to be expected. After all, despite the mythical size of the Valley in startup culture, it’s actually a pretty small area. And everywhere else is, well, big.

Still, when 15 of the top 20 most active seed funds are not based in the Valley, it might be time to take notice. It’s probably no surprise that New York had the most number of firms in the top 20. New York is quickly becoming seen as the other tech hub in the United States. However, cities like Philadelphia, Pittsburgh, and Las Vegas are also represented, and in the expanded list Detroit, Ann Arbor, and Phoenix all made a showing.

Of course, there’s plenty of debate over whether or not so many seed funds are a good idea. (Series A crunch, anyone?) The great news about so many seed funds popping up around the US is that more and more entrepreneurs are getting a shot at testing our their ideas.

And that will ultimately prove to be a good thing for all of us.

20 Most Active Seed Investors Outside Silicon Valley

lerer ventures

  1. Lerer Ventures–The New York-based venture firm is the most active seed investor everywhere else, and they were 4th overall. The guys at Lerer Ventures also run the incubator SohoTechLabs.
  2. First Round Capital–Often credited with innovation in a field usually afraid of change, First Round Capital focuses on provided services and mentorship, as well as cash, to the companies they invest in. The First Round Review is a great resource for founders looking to better understand startup life.
  3. Innovation Works–Innovation Works is focused in southwest Pennsylvania, making it the first on our list with a regional focus. They also run the AlphaLab accelerator.
  4. Atlas Venture–Based in Cambridge, Massachusetts, Atlas Venture focuses on early stage technology and life sciences. They’ve been in the game for awhile, raising their first fund in 1986.
  5. Connecticut Innovations–This private/public partnership has been operating in Connecticut since 1989. They partner with other investors to provide seed funds for startups and small businesses around Connecticut.
  6. Founder Collective–This New York fund boasts that every investor has also started a company, giving them an advantage in helping entrepreneurs. Some of their companies include Buzzfeed and Makerbot.
  7. Great Oaks Venture Capital–Also based in NYC, Great Oaks focuses on verticals like e-commerce, adtech, mobile and social. Some of their investments include Storify, OKCupid, and ModCloth.
  8. Red Swan Ventures–Forget the “unicorns.” This New York firm is looking for the “red swans: great companies most of us never saw coming.” Some of those “red swans”? Birchbox, Warby Parker, and Bonobos.
  9. RRE Ventures–This is a multi-stage firm in New York, but they’re still one of the most active seed investors in the country. At the early stage, they’ve invested in the Skimm and Datadog, among others.
  10. CIT GAP Funds--This nonprofit works with other investors to coordinate investments in Virginia-based tech companies.
  11. ENIAC Ventures–ENIAC claims to be the first seed stage fund focused exclusively on mobile technology, raising their first fund in 2009. Based in New York, the firm has invested in companies like Localytics, Thumb, and Shake.
  12. Maveron–Seattle-based Maveron focuses solely on consumer businesses. They had a big win last year when Zulily rocked their IPO.Vegas Tech Fund

  13. Vegas Tech Fund–Of all the community-based funds, Vegas Tech Fund is probably the most famous. Powered by Tony Hsieh, they are focused on revitalizing downtown Las Vegas.
  14. NewSchools Venture Fund–This Boston-based nonprofit is focused on transforming education, especially for lower income kids. They invest in edtech as well as charter schools.
  15. ff Venture Capital–Another firm based in New York, ff Venture focuses on pouring in resources and mentorship to its portfolio companies. They run an accelerator, and also make a point to keep money back for follow on funding within its portfolio.
  16. Greycroft Partners–Greycroft also seeks to serve its entrepreneurs, keeping its fund small but boasting of access to networks that would rival the big firms. They’ve seen some big wins like Braintree,, and The Huffington Post, to name a few.
  17. Bessemer Venture Partners–Bessemer prides itself on seeking out new industries and opportunities. Some of their big areas of focus right now are Brazil, cleantech, and cyber security.
  18. Upfront Ventures--A discussion of active venture funds would not be complete without Mark Suster’s fund out of LA. Suster is famous for his bluntness, and companies like, DataSift, and MoonFrye benefit from the industry experience found at Upfront
  19. Index Ventures–Based in England, Index Ventures they’re different because they are true partners, instead of free agents under the same umbrella. They focus on companies in tech and life scienes.
  20.–The last company in our list is also based in New York and sees itself as a service to entrepreneurs, not just a paycheck. They’ve invested in companies like Barkbox and Homejoy, among others.


4 Tips to Attract Angel Investment in 2014


Le Meridien Munich—Business meeting

Starting a new company from the ground floor is never easy; even seasoned entrepreneurs have been known to stumble along the way. First-time entrepreneurs have one brief chance to make a big impression on investors, and unfortunately more often than not they will fail. Following are four tips for early stage entrepreneurs hoping to prove to investors theirs is an idea worth opening their wallets for this year.

Think Like an Investor

Just like the first rule of public speaking – know your audience. Entrepreneurs who do not pay enough attention to understanding what investors are looking for will most likely fail to engage their audience. First-time entrepreneurs often spend too much time emphasizing their product or service during a pitch and as a result forget to answer some very key questions – the relevant experience of your management team, the go-to market strategy, the competitive landscape and potential for acquisition, just to name a few. Investors respond best to a balanced emotional and analytical appeal; think about it, would you rather have someone read you an almanac or tell you an exciting narrative based on the facts that almanac contains?

Choose Three Takeaways

If there is a lot of information to convey in a limited amount of time, abide by the rule of three. Before you step foot in the meeting, decide on the three most important takeaways prospective investors should leave the presentation with. Then, whether it’s placing an easel at the front of the room with the three takeaways listed or bringing them up several times throughout your presentation, let investors know from the beginning of your pitch that if they remember nothing else from your presentation, they should remember these three items.

Think Big

One of the biggest mistakes early stage entrepreneurs make is not thinking big enough. Investors need to know how you plan to reach a large market with a sustainable competitive advantage. The most profitable ventures are able to scale quickly and efficiently; entrepreneurs who secure funding are the ones who were able to communicate how they anticipate and plan for challenges they will likely face throughout the growth of the venture. There is considerably less risk for investors, who remember are looking for a big return, if your market is enormous. An enormous market means a venture does not have to capture an unrealistically high market share to  command an exit value that will enable investors to meet their return requirements ; a small market means a potentially smaller exit event that could fall short of an investor’s needs or expectations. Showing investors that you have a realistic plan to quickly scale and grow within a large market oftentimes means the difference between attracting their money (or not.)

Make Realistic (and Defensible) Financial Projections

With so many sky-high valuations making headlines in 2013, it is easy to see why early stage entrepreneurs might be tempted to overestimate the value of their idea. Doing so, however, can seriously limit the longevity of your venture and ability to secure increased funding during subsequent rounds. It is also easy to price yourself out of the market if investors are turned off by the unreasonable value you place on the venture– in this scenario you do not even get the first round of funding let alone the opportunity for future investment. Do your homework. Take advantage of online tools like Worthworm, seek the advice of mentors, and ensure you walk into a meeting with a defensible and credible value and financial projections.

It is undoubtedly an exciting time to be a first-time entrepreneur as the public continues to embrace innovative ideas in so many diverse industries. However, even the greatest ideas can fail to take off if the money dries up. As you seek to attract angel investment this year, consider these four tips as you prepare for that critical first meeting where making the right impression is more important than making a big impression.

Alan Lobock is the co-founder of Worthworm ( and SkyMall. Having been on both sides of the start-up investment scene– seeking investment for his ventures and as an angel investor himself, Alan launched Worthworm to solve one of the biggest challenges young companies and their prospective investors face—how to compute a credible and defensible PMV for an early stage venture seeking angel investment.