By Laura Lorek
Founder of Silicon Hills News
About 40 entrepreneurs turned out on a drizzly and cold Wednesday morning to Abel’s On the Lake in Austin to meet with angels.
At 9:30 a.m. about a dozen angel investors talked with entrepreneurs at round tables in the empty restaurant.
The Central Texas Angel Network, known as CTAN, holds office hours to give entrepreneurs advice and insight into its funding cycle.
CTAN holds five funding cycles each year. Applications for the first funding cycle of 2014 are due on Friday. The nonprofit organization accepts applications online through GUST.
CTAN charges entrepreneurs a $250 fee to apply for funding consideration. And if an entrepreneur is successful, CTAN takes a $5,000 administrative fee if $200,000 or more is raised and $7,500 if $500,000 or more is raised from CTAN members.
The funding process is kind of complex. So office hours are a great way for entrepreneurs to get feedback on their companies. The angels speak bluntly and tell those seeking funding what they can expect during the process which lasts about four weeks, if they make it to the final pitch event.
In 2013, CTAN funded more than $9.6 million worth of investments in 17 new and 16 follow-on companies within its existing portfolio. That’s a new record from its record $8 million worth of investments in 2012, according to Brent Elyea, its executive director.
On Friday, some entrepreneurs had never been through the process before and came unprepared. Others had boxes with products. One team toted samples of food products. Another entrepreneur had a blue slick looking drone-like device.
The event lasted until 11:30 a.m. That meant that with the large crowd each entrepreneur got to meet with between three to four angel investors for about ten minutes each session.
CTAN regularly holds office hours at Abel’s On The Lake and the event is worth going to for entrepreneurs looking for some frank advice and feedback on their ventures.
Having gone through the process, here’s my advice on pitching to the angels:
- 1. Arrive early. The event starts promptly at 9:30 a.m. and the early bird entrepreneurs get the first meetings with the angels in attendance. Some angels show up later and so do some entrepreneurs. But if you get there at 9:30 before a funding cycle deadline, there will be a crowd and you’ll spend time waiting. We waited 90 minutes to talk to three angels for a total of 30 minutes.
- 2. Talk to Executive Director Brent Elyae in advance of the event to find out, if possible, which angels will be attending. CTAN has close to 150 members. It’s important to do research on them beforehand because each angel investor is different. Some come from tech backgrounds and others are from consumer products or family businesses. It’s important to find the right fit for what you are pitching.
- 3. Practice, practice, practice a 2 minute or less pitch. The session only lasts 10 minutes and you want to get as much feedback as possible to determine whether your venture is a good fit for CTAN.
- 4. Ask them questions to make sure they are active investors. Like ask them what they have invested in and how many companies they have backed. If you get their names ahead of time, you can research this.
- 5. It’s important to talk to as many people as possible about your startups. A few angels liked what we are doing. A few of them didn’t. They all gave us valuable feedback.
- 6. Read everything you can ahead of time about CTAN, its investment cycle, its portfolio companies, blog posts on pitching and that way you’ll be prepared.
- 7. Bring business cards. Leave them with everyone. They talk to a lot of people and you want to make a good and lasting impression. Make sure to thank them for their time. They are all volunteering.
- 8. Write notes. I wish I had done more of this. I was so busy focusing on the pitch and listening to the feedback that I didn’t write down key points. I think I would ask them next time if I could record the interviews with my iPhone to listen to later. Sometimes it’s hard to remember everything when you’re doing a round robin meet and pitch.
- 9. Attend another CTAN office hours event. It got easier the more people we talked to. And we met a woman who had been to office hours a few times. She had a polished pitch and knew exactly which angels she wanted to meet with at the event.
- 10. Network with the other entrepreneurs while you’re waiting in line. You can learn a lot from their experiences.