There's very different businesses who've raised very different angel rounds This is gonna be really exciting because so much of being great at raising capital any source of capital is understanding what it feels like to raise these rounds And so much has been put into candidly from me and others around how to raise venture capitalists but not as much has been put into the idea of how to raise from angels which is why we put it together I have a couple housekeeping items to go through first and I want to set the stage before we invite Nick Lassa Damian and Shannon to talk So we're gonna jump right into that All right first off as always in any of my workshop let's go through housekeeping So put your cameras on I'm not the only one that's going to be speaking and I will tell you from experience it's much easier to look at people as they're reacting to you as opposed to empty screens So cameras on especially when you're asking questions be interactive especially with the panel when it comes up Don't be shy Anyone that asks questions will likely get the most out of these added this experience my phone take notes and I think we all want to try to make a difference in what you do and you're not going to make a difference in your process if you're just listening to it and forgetting everything that I was shared And then when you can share your favorite insights on social if you tag me that would be my best to amplify your message OK So that was a quick rush through because like I said I think we want to get talking to our guest If you could mute that would be amazing So doesn't throw me too far off But the topic of that we're covering right now is around angel investment right It's people very curious about this topic right now because of what we're seeing in the market What I'm seeing in the market is a squeeze on the pretty feet round as in people want more and more attraction before any formal investor decides to step in That is increasingly the case which means founders a lot of times need to find capital somewhere to get started somewhere to get the tracking somewhere to get the product that these pre seed and seed investors are looking for And so where does that come from It comes before three seed round it comes before institutional investors and increasingly it's more and more money that we're looking for So that's why I think it become such an important topic in order to level that and to understand who we're talking to I also am going to reference this a little bit later I want everyone to go through a quick exercise and then we're going to want a poll against the results I want everyone to open up linkedin go to linkedin I'll do this with you and I want you guys to quickly plug in angel investor up here angel investor And then I want you to click on to first degree OK We're gonna run a poll Paige if you could throw up the poll or let me know if I have to do it Yeah it looks like you have to I want you guys I throw up this poll and I want you guys to answer based on how many results you have here OK

About half of you have participated Awesome If you guys could throw it out if you wanna get Bye which I can't find computers I really

two seconds guys my computer is about to die and for some reason it's plugged up that way Maybe just a quick raise of hands though How many of you did not know you could do this on linkedin in search OK Quite a few then And that's one of the things that we want to bring out I'm so sorry Give me a few seconds and maybe you can do a little advance actually Do you mind going through and hugging each of the panelists come on and give 20 seconds on the background of their company that I'll be right back for sure Yeah that's exciting maybe since I see Damian right out of the corner of my eye I will spotlight Demi and you can give like a quick that's the wrong person You can give a quick intro on your company who you are Maybe a 32nd spiel Awesome Yeah my name is Damien Borba I'm from Brazil I live in California I live here in the US for 17 years I was incorporated my whole life I worked for Adobe paypal into it Blackberry six years at Adobe and last year I made the decision to go full time with the start up Pactto It's it's quite a journey And there's a lot to talk about there And Pactto is a platform for mainly creative professionals to review videos images even audio files in a very human very easy way from your tablet a computer phones even the Vision Pro and Meta Quest three now So you can really share your feedback in a in a way that people can understand So it's super easy to create that feedback super easy to understand that feedback And there's a ton of A I there to list the action items that they are created after you review something and very soon we're gonna be acting on the action items So the A I will actually like be an agent and act on the action items fix book change videos and all those things Perfect Thanks Denver I'm back Was Demian the only one that went Yeah why don't we bring up the other three real quick and then we'll get into the quick presentation before I only cut the end of Demian But let's do 15 seconds on each person Just tell me what it is really quickly So people have the context for this Let's go with Nick be please Hi I'm Nick Bloo co-founder and CEO of Traveler We're a ecommerce platform for hotels Think of a Shopify for hotels to keep it simple love it Larissa can you tell us about Jo Hi Larissa C co founder of join we're an A IOPS platform for growth stage companies who basically do all the work that you don't want to do for you in the background Amazing And is Shannon here I don't know if Shannon's here Not yet She's probably joining towards the panel Ok Love it Thank you guys for bearing with me right there That was quite embarrassing but we're good Ok so we just did everyone I think answered we got 81 of 98 people and I'm gonna I'm gonna share this result with you But one of the big things that we'll talk about is how to find angel investors And I think a lot of you will be shocked to know how strong your network actually is within angel investors And that's one of the things that we want to expose today Let's talk a little bit about process and then we'll hear from the Panelist around how they want our outsourcing angel investor as well Ok So one thing to start thinking about before we move forward I'm gonna jump back into this So when we got when we had you guys register for this workshop we asked people to submit questions because we want to understand what you all were concerned about I had already thought about three different topics that I'd want to touch on And it turns out most of the 87 questions I got submitted really fell into these c 33 categories So a lot of you were asking what is an angel investor Not exactly those words A lot a lot of times it was how are angel investors different from metric capitalists How do they make decisions What do I need to pitch them But at a high level it's answered all these questions are answered if we can better answer what is an angel investor OK And the second question which is what that poll is out of all about was how do I find them Right What the angel syndicates do I ask my friend How do I find them And then what do angel deals look like How do we set them out How do we collect money from angels These are the three main categories I'm gonna spend more time on category one I'll touch briefly on two and 32 and three I think is gonna be really more fun to ask Nick De and Larissa and Shannon about Ok so what is an angel investor What what the question of what is an angel master is super important Because if you all have seen any of my work within fundraising especially with VC si always kind of start with this idea Do you understand the VC psychology of how these CS make decisions Because once you understand how V CS make decisions you have a much better sense for how to influence them how to pitch them et cetera And when we think about what angel investors are there are three categories that I wanna throw your way of what an angel investor is and why they're getting into it OK So those three main character sort of categories I want to share with you are this idea of total charity Somebody that is just out there who wants the back George because happy to spend time with him at it in his in his nativo days they thought he was a good guy And if he wants to do something I you know I wanna back that or Xavier you know spend time with him before I just want to back that kind of like that charity But it's helping a friend Then there is the category of people of more sophisticated people that have extra money They've heard the stories of the people being early in Uber and getting this huge outcome but they have extra money They want to put some of it to work in venture capital get exposure to that Then there's this third category a very professional angel someone that's managing a large pool of personal money like they would as a formal venture capitalist OK So these are three broad categories that influence the way angel investors make decisions There's 1/4 category that exists but I want to caution you around the temptation of taking this money That's dumb money That's dumb unsophisticated money which sometimes can be very much easier to convince to give you money in the outset but become much more painful to have on your cap table later These are people that either don't know what it means to run a start up and so when they make their investment they think they should be getting some sort of like regular update even though they wrote like a $10,000 check or as your company goes up and down up and down they get nervous about the money that they invested in the short term it might feel very tempting to take this money in the long term This is almost always more costly than is it worth including Ok So here's some categories to think about I want to shift this conversation much more to the idea of how these people make the decision Ok I'm going to ask our panelists to maybe weigh in on some of this But here are some categories of how angel investors make the decision And I kind of think about it honestly in this back order Not exactly but an angel in an angel investors mind I think a relationship is maybe one of the more important things if not direct relationship with the person asking for money and a relationship with somebody who introduced the deal to them right These are these are investors who have money to give but aren't spending time analyzing the market they don't know exactly what's going on So their relationship has a big influence on how they make decisions The second thing that everyone needs to understand is the momentum of the deal and credibility How much the shiny wrapper of this deal whether it's because the founder went through techstars or the founder did XYZ or the fact that a bunch of other angels have already invested There's a lot of superficial push around momentum and credibility that has a big impact on angel investors That's the only way it has an impact on venture capitalists And then further down the road is analysis I would say analysis is something that is much more reserved for institutional investors or actual venture capital investors Some angels will do a little bit of analysis But I think it's a very small piece And then of course we always have to think about that idea that there is like a light there's a light veneer there's a light covering and sprinkling of charity and just wanting to help some people that I think enter in most angel investors minds One of the things I would tell people about the idea of an angel investor is that angel investors that term comes from Broadway back in the day where people would actually put money into Broadway shows not expecting any money to come back but just being an angel to support these bits of art that German has been pulled over to start ups And so there's always going to be this little bit of charity associated with investors important Now I essentially did this full education part of the angel investor workshop and panel to make sure we underline this one realization And I know this is the case because I know based on the responses of our panelists and how they collected their money that they fell into this trap a little bit too It is very true that angel investors are easier to convince in a lot of cases than venture capital firms You can catch an angel who happened to have gone to the U VA like I did and loved U VA basketball And if we get on part of our conversation where we hit on that you know there is this good feelings good vibes and they're like you know what I think I wanna back this guy I don't really know why Like maybe he's not building a big business but I wanna back this guy there is that feeling of charity of you know I comes from Romania as well and I want to back Romanian founders I just want to do it on a broad basis So I'm gonna back it out here That is extremely this is extremely true and it makes sense But that reality drives founders to make the most common mistake in fundraising with angel that they should not do which is that means that you all will go after angel investors piecemeal one by one and hope that they make a decision to invest in you one by one by one by one The thing is the thing about this slide is I showed this slide the founder is getting ready to raise venture capital It's even more important with venture capitalists because on an island you know it's very hard for them to make the right decision which is invest in you angels It's high It's more likely that they will make a decision to invest in you But if you want to maximize the potential of raising from angel You should be running a process too If if you actually bundle your race with angel investors and then do research to try to find what angel you could go after and have them be a part of the process where you're talking to a bunch of angels at once And you can tell them that other angels are investing they're all coming in They will feel a momentum and they will feel a sort of not only pressure like scarcity pressure but also that credibility of I don't know what I'm doing right I don't make a ton of angel investments But if Paige said that you know a few people are doing this deal alongside of alongside of nave An Anastasia talks about other people coming in that makes an angel feel much more comfortable about putting money to work and so on the process side of things and how you actually convince angel investors I wanna make sure you guys think about this concept which we're not gonna go into huge amounts of detail today at But it's this idea of calendar density It's the idea of if you think you're gonna go raise a round of angel funding and you have some time to prepare for it Do not go piecemeal do not go one by one research who you want to talk to first and then try to run a process where you're talking to all the angels at once Ok Obviously there will be some bleeding along the edges It's not gonna all be perfect But if you can at least get yourself to push in an organized fashion at the beginning I guarantee you your conversation will end with angels we'll have more positive outcomes Ok So that's the first topic that I want to make sure we covered next How do you find angel OK We did an initial little exercise for you to go into linkedin in order to find just the term angel investors Now other people ask me like well what about my company that's in beauty or what about my company that's in A I or what about my company that's in fintech And what I'll tell you is the link of search is a very powerful tool that I wanna make sure everyone at least knows the high level of how to use And on top of the angel investor search result that you can go through you can add other terms like you can see that I've already been doing this to test it out Let's say I have a company in the climate space I'm just putting angel investor in climate in the hopes that people in my network are self identifying as an angel investor and then somewhere else in their profile they are adding something that indicates that they're interested in this space I'm interested in right So if I did angel investor and hr for example like Larisa might be interested in that right So who is she She has a bit of an hr platform that or angel investor and maybe somebody that had done some stuff in hr in the past would be more likely to think about our business So at a high level I wanna make sure people know the power of linkedin to be deter So how do you find angels You are probably directly connected to way more than you think And if you were to go to the second degree connection as an angel investor that your network is connected to that number will explode OK How else do you find angel Does anyone else want to throw in some ideas into the chat I want to see if people actually have a good sense for what they can do Bye bye school I Twitter Yeah So there are a bunch of communities to go through networking events So this is the one that came up that sounds the least sophisticated is the one that I've been waiting for which is what Idina said I said ask around ask your friend that seems extremely unsophisticated But what you'll find is that angels tend to find other angels They hang out with people that also angel that I always tell people like angel investing is a really expensive country club to join It's kind of what people do in the thete circle they pay $25,000 to angel and invest in there so that they can tell people angel invest right And when they do that they end up connecting with other people So very important to be asking around very important to be asking your network Very important to be asking other angel investors that you've already connected with Hey are there other angels that you know that you think might be interested in hearing OK So that's lightly on where to find an angel Again We're gonna have we're gonna have our panelists talk through some of this later But I wanted to go to the last portion which is structuring an angel race OK This is one of the bigger questions What do we use Do we use a post money cap safe Do we use something else Do we use a do we use a price round How do we do these things I have I have a quick soapbox around valuation that not everyone we align with out in the world But I want to tell you how I think about structuring an angel fundraise as well as valuation how you find valuation So I think structuring it you want to do the simplest thing possible I think Y IC has done a good job of creating that safe formalizes and normalizes a certain structure One big call out there is that if you're using a post money t save most money caps saved an anti devolution in them So if you continue to raise multiple rounds on multiple faiths after your friends and family angel round that they will continue to be more and more punitive to you Not gonna go through all the details on that But page if you could send through the article on post money cap safes that'd be very helpful So that's the first thing that's not that's not telling you to necessarily not use the post money cap safe It's just to remember that in this round which is going to be the lowest valuation cap you likely raised against you continue to raise face after that low round could really hurt you in the future And the second thing I want to tell you around valuations and structure is when it comes to valuation you should really understand that the people that are angel investing you like the first money in your company are taking on incredible risk alongside of you And some of them are your personal friends and your family members people that are just supporting you at the very beginning of your journey because of that I really don't like it when I see founders trying to maximize valuation at this route You know they're like need some people doing it at eight I think I can convince my grandmother to take it annoying book money valuation cap It's just not the way to think about it Right Like I saw people doing uncapped things for their friends and family rounds and I it just it just like doesn't feel great to me This is my soap box speech to you guys when you're raising your friends and family around is you probably aren't going to be raising a gigantic round anyway a few $100,000 And so even if you were to put the valuation at a lower valuation the amount of dilution that you think on there is not going to be the thing where people are like my God like Malika doesn't own a lot of her company because she did $300,000 at a three cap or four cap or whatever That's not gonna be why you don't own enough of your company And I guarantee you you're going to feel way better when your company is hugely successful and the people that believed in you in the very beginning win with you as well Lastly like it's so much easier to get people to go along with you when you have a reasonable that really reasonable valuation cap and the momentum from going from a $3 million angel friends and family round or $5 million friends and family around and then going to raise the preceed at eight or 10 It's so much better than being like I'm sitting at a million dollar friends and family round with note Now I need to go raise my first institutional round and people are like quoting me between six and $7 million caps anyway Yeah So that that's the first thing on valuation and structure The second thing that I wanted to call out because I just did an article about this is how to collect angel check So collecting angel check is like a very finicky thing right Like you're trying to get someone who hasn't done this before to wire a certain amount of money $10,000 Even maybe if you're lucky $15,000 or more There are documents that they need to review all this stuff because of that I wrote an article about the concept of roll up vehicles which is a way to collect checks from angel investors in a very streamlined fashion where if you were if you were to collect multiple small checks of 50 small checks they get bundled under one line item on your tab table That's the that's the advantage of using a roll video roll up vehicle after the fundraise before the fundraise It might be even more powerful because I'm talking to David Abrams and he's interested in investing in me and we're like getting to a point like yeah I'd love to invest $10,000 You go great Let me send you the link to the to the investment vehicle It's like an ecommerce checkout flow It's super clean It has the gravitas of hey this deal is coming together It feels like it's fully structured They can click through information on it and it's just like a check out process as opposed to in a normal basis You'd be like ok let me send you the doc let me send you the YC note the YC safe Let's have you read through it OK Can you wire your check to me And and what's your what's your bank account information It it's super painful I highly recommend you guys read through the roll up vehicle article that I wrote learn more about it again We don't have tons of time spent here You know you can reach out to our team later Follow up One other thing is as I wrote that ro roll up vehicle essay and as I started planning this event Angel List actually reached out to me They didn't influence the writing of that post They didn't they also didn't influence the creation of this workshop but they said they'd like to support anyone trying to raise on roll up vehicles So if you guys are thinking about it you should register for Angel List Using the Flank Angeles is trying to figure out ways to give our community more VIP benefits The only one we could secure Well not the only one the one that we could secure this time around was five slots of VIP P support which cost a couple of $1000 I believe the first five slots will get angel VIP support for free if you do it through this link And then the other thing to note about the way road vehicles work is that it does cost money to use but not upfront So you don't actually pay money to set up the roll up vehicle which is kind of nice So like if it doesn't work out and you don't collect the money you don't owe anything it's only if you actually do the whole round ok But the high level is the structure wise we talked about valuation we talked about theft we talked about how you take care of your friends and family And then now I'm talking about keeping your cap table playing You will benefit from this tremendously especially as your company gets later and later stage Ok Usually I like to have the informational parts of my workshops have a little bit more breathing have a little bit more interaction But I wanted to just make sure that I put those three main things to talk about on the table before introducing our founder panel and jumping around and asking questions to them We're gonna do some brief questions and loop them in But I think the most value is going to be out of getting you all to ask questions and having a little bit of interaction with me involved OK So page if you could help me s spotlight me Larisa Dum and Nick that would be really amazing Thank you

All right Are you spotting There you go So Nick I wanted you to talk a little bit hi Shannon Before we go we had Demian introduce himself Nicholas and Larissa Shannon do you mind just giving 20 seconds on what ear is You don't need to tell us Just tell everyone Hi I'm Shannon Davenport I'm the founder of ear Beauty We are a prestige bath and body brand that focuses on the skin below your chin Love it I love that tagline It always sticks my brain I kind of wanted to go through yeah I wanted to go through each of you and quickly talk a little bit about where you source your like how did you find them Was it a was it a specific process or was it a kind of piece meal and just asking your network Cause cause Nick you have a very quick answer in the survey that I sent to you How did you start We I mean where we got so where we ended was people that I knew and well most of them were people that I knew and that I had worked with before and kind of you know knew my track record there were a couple of introductions including the VC which came in our second tranche and another let's say professional Angel I guess there was an introduction from someone else Everyone else was people that I knew to some degree but it's your primary network Did you did you ask them for an introduction to another layer of angels or was it all just like your first year connection I've only asked instructions to very few most of them was actually going to them themselves And in some cases that I knew that there was an opportunity was or it was adequate right To ask for an intro I did that I was surprised Right Awesome OK Larissa what about you This I feel like your direction might have been very different So how did you source your initial set of angels to talk to Yeah I initially I went really hard on cold outreach So I used a lot of like linkedin Search I was specifically focused on angels with an operating background So whether they're like head of Biz Coo chief of staff so could relate to the problem The one thing that's hard with cold outreach is just you don't know who's actually deploying So a lot of people say that angel investors but they're not actually investing but they often might know angels that are investing because a lot of angel investors are part of communities because they are trying to figure out how to raise So usually I was like ok I know you're not deploying But would you introduce me to angels That could be a fit Also two of them became customers So even though they couldn't deploy they actually started using our company which is giving us money in a different way on like SAS contract And then yeah so usually 11 angel knows a lot of angels We had one angel He was literally he introduced us to like 20 that like 75% ended up investing in us So always like having them like expand I would say helps So yeah kind of and then also warm interest So we went through techstars and they have a huge mentorship network So honestly that helped us a lot to get a foot in the door with angels But yeah and yeah he invested in me as well So he was a kind of our domino pin that like made all the other angels come in Yes Yeah And I think what you said underscores one of the points that I made about angels roaming around in packs not only do they roam around in packs but like they're kind of like looking to their left and their right and they try not to make a decision themselves much like honestly much like later stage investors but angels even more It's like if my buddy Damian and my friend Shannon both invested in a sure you know and so these can be big unlocks if you find certain nodes Shannon in particular I wanted you to talk a little bit about the different sources of angels that you found because you happen to list out a few things whether they be angel networks or syndicates So what did you find as good sources for you Yeah so I have AC PG company obviously in beauty and personal care And the in CPG I think there's you tend to find a lot of angels that if they invest in CBG like do so across different CBG companies But some and I found that a lot of angels te ty typically tend to find like an area that they like and they invest deeply in that area So I went through an accelerator as well called Skew which is based in Austin and it's AC BG Accelerator So that was kind of I would say the first opening point to mentors and then mentors also can become angels So that was one way the other way and I might be different from some people on this panel but I've raised primarily from female angels And I think it's really interesting that female angels like that There's 30% of angel 37% of angel investors now are women and a lot of them are just getting started as angel investors And so 0 90% yeah that's awesome So a lot of it has been for me personally networking with other female founders and finding some of these prolific female angels and and then syndicates So a lot of them will run syndicates on angel list also on Sidecar is another one So yeah I think finding people that like you know and I think because funding is so much harder for women from V CS statistically it's a really great and exciting place for female founders to look for capital but also for our investors to be able to open up a new potential revenue stream for them and kind of let them in on some of the wealth being created in this asset class Super fun That's super helpful to hear And then lastly Demian anything different from you had to have Yeah I know mine was like way different I would say a lot of similarities in like the results but how I ended up there was very different right I think I took your I took your amazing course in I think it was November right And we came up with a list a list of V CS a list of angels And I just started reaching out to everyone I made progress with V CS progress with angels but things were always looking better with the angels that we were speaking with like I had a lot of VC meetings and some of them I had like four or five rounds of in person and like online interviews and at the end they're like maybe not now But with angels was very like people that knew me more It was always better Like in I came up with a strategy of finding strategic angels So I the way I present the round is I I'm looking for strategic angels and I just I was just closing with this big guy from Pixar that's like was there for 20 years worked to Steve jobs because I presented you know like this is a strategic angel opportunity Do you want to join And but it's a lot harder than no matter how good your planning is It's it's how bad you want it in the end right And yeah just keep pushing It's great to hear I mean there are a lot of vectors in defining angels but we are hearing the same thing which is like their decision criteria is very different from these C DS and it can be much easier to hit on somebody that just kind of sees you as a found feel your energy and wants to take a chance on this And I think like what you found de Demian is maybe what would I let off this presentation around which is market dynamics shifting in a way where I think I think VC is over correcting in the wrong direction But the preceed investor tranche is not taking the bet that they should have that they should be in the past which is like we want to invest in something that is very innocent But we believe in the idea we believe in the founder that tranche of investing is just like we want to do more we want to see before we want to do more And it like how do I get there before I can show you that So the angels are what we're talking about what we're focused on OK There's a kind of a Nick Yeah And it's just a quick a quick story and that I did you know the same thing as Damon I started with a you know I won V CS and Span My will is like crazy you know talk and it was so funny the other day and I don't know if you guys saw that Twitter that you know half of V CS are pretending and then this and this and this and then you get like three out of it They start with So I didn't know if I'll cry or laugh when I saw that but it was pretty much my story and because we ended up breaking our fundraise in trenches right So one thing that I learned that you know learned from you Jason and then from RV CS is reframing the story repackaging things makes a massive difference right Because our V CS say that VC is a momentum trade right So that momentum and creating that on people's minds But the point that I'm trying to make is there was no way we could get a pre seed investor at the very beginning because you know they're always moving the goal post they want to see something else and this and that and because we broke it into trenches we were able to get a VC on the second trench right There was already some money there was already something going on there was a product et cetera So it was just that you know a little bit necessary for them to OK I'm willing to make a bet right So getting that on the zero would have been extremely difficult as it was super helpful here right I was just gonna say similar experience like just V CS taking a really long time requiring a lot of stuff And I just as a solo founder I really don't like wasting time having meetings on meetings on meetings and angels like they're also busy people who typically like are also entrepreneurs or they have full time jobs or whatever So it's really nice to by the time you have a call with an angel They're not just like sitting around like booking their calendar with you know with with meetings with founders like they have a pretty clear intention if they wanna talk to you So it's really I found very similar process to you Awesome I wanna throw out an open question for everyone and then we'll start sourcing questions from the audience But I wonder if any of you know feel free to jump in can talk about the impact of momentum from your from your angels as it impacted other angels as well as some of you were able to lock down some more formal venture capital dollars So that's something that you could feel happening And can you say a few words around like what it was like and what you didn't experience or what you know what happened Yeah II I can get started So I think momentum is everything it's everything right It's you go from this misery of not knowing having unclear answers and feeling like you're drawing and then all of a sudden something happens right It's a client it's the first investor whatever right There there's there might be different triggers for different people but you sort of find a narrative and you see that things are moving and then someone makes a bet when that someone makes a bet you get excited and you always have to you know be careful with your emotions but you try to wrangle in the next one and then you know you have two and then two is like so much more powerful than zero And then getting to three is so much easier and then so forth and so on And then I think managing that you know excitement misery trying to wrangle people in the right direction at a certain pace that you don't lose anybody along the way That is what's so important And again one thing that I took from from your course but again it's a momentum trade and momentum is everything in my humble opinion Yeah Damian Yeah no same thing It's it's funny like when you get this big confirmation that there's one investor there then it's almost like you get excited then you ping the other There are similar They I'll jump in It's always like this crazy momentum But one thing that I think it's really important to highlight is that in my experience for example this Pixar guy I had two meetings via Zoom and they were OK And then last week I went to San Francisco to meet him in person That made a huge difference So I think meeting people in person is night and day So if you can avoid like online meetings please do it because it's very different Yeah it's a relationship game Anything else I know Shannon and Larisa we focus a lot on female investors Do you feel like obviously they're they react to you differently but you feel like this sort of investor psychology is the same or when from when you like meet men and women I think that's a relevant topic to share I think well for me like the whole process of angels again because it's like someone's personal money it's much different than raising from a fund right And so I take it really seriously when I take someone like you were saying about like having some crazy valuation like for your grandma like I take it seriously that I'm taking somebody's savings or their whatever and they're giving that to me and entrusting me to grow it And so it is kind of inherently a more personal relationship And I think because angels also you know they've they're doing this because they want to level up in their career They want a network or they wanna like learn businesses better or start to advise businesses Like there's a lot of different reason or just create wealth there's a lot of different reasons that angels start to do this But what I've noticed like in terms of momentum is that it's a really big advantage because they will advocate for you like crazy And so if you get tapped into these like super Angels or connectors or even just like people that work in your industry they you know I think it's like I mean I mean a lead investor of VC will do that too Maybe But you're when you're talking about you know one person making up half of your raise versus like five or 10 people that are connected like suddenly you've got a lot more people to call on to like create that momentum create that urgency to create that excitement And so it takes longer to add those little checks up But you also kind of have I mean one of the things Jason that you talk about is the idea of angel army And I think you mean you meant that internally as like an internal way of thinking about it But I actually tell my angels Angel Army I say that and they love it I think they like the idea of like yeah we really all believe in this brand and we're gonna go out there like an army and like make this happen And so you know just bringing people in with the idea of like hey you are you are one of my early advocates and you are part of my little army strategy of like going out and bringing other strategic people in or connecting you with partners or whatever I just find that it's a really different way of creating momentum on its own It's it's like instead of one big push it's like a lot of smaller pushes Ok There's any additional thoughts before we open up some questions Yeah let's say in terms of angels I didn't really notice like a difference in terms of process of scrutiny between men and women and angels VC is very different Even though I will say some of the worst calls I've had were women V CS Like absolutely the worst and most predatory terms So anyone that says your woman founder says funds for you now your problems are solved It's bullshit Like they anyway but that's like a different story But with angels I say the one thing that has been different with like our women angels I think because they understand the uphill battle whether it was because they've you know climbed the leadership ranks in their companies or they founded companies like I'm constantly on their mind like it's like a constant stream and it's like I met this person at the event and I think you should talk to them or I think this could be a good customer I think So they constantly bring me up to people and make connections for me And that's been like nonstop I think with some of the male angels was like the initial like push of like I know all these people and like you know they connected me But I feel like with the women it's been like really constant and I've been like really strategic really considerate like just today one of our angels introduced us to like two angels that she met at an event last week And she was like I love this company So I think like that's kind of been the big difference in terms of like women male angels but otherwise with the male angels I didn't you know with some of the V CS as women founders you get more scrutiny you feel like you know your competency is questioned like people are really risk averse I didn't have that with the men but also a lot of the men we raised from like live this problem And I think that made it really different like they are high ranking operators at companies that are like yes please like save me So anyway that's my two cents on women and men angels love that Ok There Michael Gilleo had asked a question that I think a few people actually threw in which was how you set terms Michael do you wanna do you wanna come off and join us if we can find you here Like why not It looks like I can't add him as a spotlight Yeah OK I'll replace the last everyone else right But yeah can you ask your question kind of like give it a little bit more context Sure You know like super straightforward who set out the terms you know I've spoken to some angels and I guess lesser or I think Jason referred to them as dumb money they you know talking to an Orange County guy that worked at Oracle in the eighties you know he tries to give me a shark tank deal other people you know I think are a bit you know up in up in Silicon Valley you know up here in San Francisco seem to be you know a bit more savvy So who set the terms how did you then justify those terms as you went from Angel to angel So were you giving different safe terms different caps for different people you know I'm sure they're gonna talk at some point So maybe just start there who set the terms How how'd you negotiate that Awesome Anyone can chime in I have my own thoughts but anyone else can chime in So on our end it was a little interesting because we went through techstars So we did like a first tranche that was like preferred terms So it was like we did a 5 million post 15% discount for a subset of the race just for angels that come in early And then it was always with the disclaimer once the set terms are set by VC we're changing it So we actually then had everyone move to the 8 million post and 15% discount But it was like this window where it was like hey you're coming on preferred terms We know you're taking a risk We want you to benefit from coming in early and we made a decision on how much money are we OK to raise on those terms So we're not hurting our dilution So we have like this proforma cap table we're mapping out all the tranches So it's like OK once we're heading X amount of money on this valuation we need to like up the valuation So we don't hurt ourselves But that was kind of again leveraging the techstars fundraising momentum or like the tears momentum in general And then like making people feel special because they are But yeah once the investor set the terms our lead investor everyone came in on those terms after that anyone else that set their own terms without a third like without tech stars momentum like yeah So in our case I've always set the terms I've always tried to find the simplest across the board same you know same terms for everyone It's a bit it's a bit of touch and go like trying to you know grasp as much information from the market of what's going on today as well And I think to your point before you know thinking of who we're talking to So again we have this unusual two now soon to be three trenches of the same realm And when we first were raised I think it was 10 million posts And then soon after we realized that a we didn't raise as much as we wanted B we decided to as a result of that do a pivot And then we went back to them and said guys we think this is too expensive We didn't raise as much money and we're gonna pivot so we're giving you an option to walk away or we're giving you a discount So now it's gonna be a million post They all stayed they all appreciate it And then the subsequent round which was I think a year a year and something almost a year and a half after that we raised on this the exact same terms because the market was very different right It just continued to deteriorate and now we're gonna raise a little bit more under that same and then be done But I think it's trying to listen to the market and be confident in the sense that you're being fair right Not trying to optimize but also not you know giving away the farm on day one because that's gonna make it impossible to raise funds later on Right So it's it's essentially trying to balance short term needs with long term liability I wanna give you a way of Shannon you ever thought of this I was just gonna say again Nicholas I sounds like my process was very same similar but I think in terms of valuation and setting the terms like I would just say especially with an angel if there's somebody that's trying to like give you a bad deal or beat you up on valuation that is probably not an angel that you want to work with I've really never had and I feel like my valuation is fair and I can explain it and back into it and if and I have had V CS like wanna negotiate the valuation because again the market tells you the ultimate price even if you start the conversation or you anchor it with your valuation But I do think like at the end of the day I've never had an angel like have really any issues with my valuation I don't I think I would think twice about wanting to work with them if that had happened Yeah the way I wanted to sort of organize the information that you're hearing from Larissa Nick and Shannon for everyone but you Michael is it all comes down to being able to justify evaluation at the very earliest times in your first deal ever with the very first angel that you talk to You have very little that you can like gum on to except for doing research right You can go around and say like look I went around saw all the deals that are being done It sounds like a lot of people are doing deals in this range right And as long as you can put a story around that you should be able to justify and push towards evaluation that's fair The moment more people come in then you get to add to that story right You get to say I look at the market not only that but Larissa and Shannon both join the same syndicate at these terms And then once you get something like ears to join then all of a sudden the justification for where your evaluation is landing gets stronger and stronger and stronger So that's kind of the case of valuation at any stage But you know the trick of getting it started in the very beginning is probably what you're asking about to me I would go out to the market look for other firms other companies that you think I've gotten funded in your space and then take into account what I said which is like look we're trying to create a fair evaluation for the angels that jump in right now OK Well II I was under the assumption that it's really like this money goes to getting to this milestone this milestone will equal a certain amount of revenue that revenue you know discounted cash flow whatever really backed into like OK well the company is gonna be valued at that point At that time So I've been given some advice that to try and get the first investor in you give a discount for that you know that cap and then other people don't get that cap So you know I guess it's just yeah I've heard I i it's possible but what you're talking about when you start talking about discounting cash flows you're talking about multiples for a company that isn't even like doesn't probably doesn't even have product at this point So it's like the amount of false specificity that is involved in something like that It is like so far beyond how evaluations in the early stages actually happened I would not go in that direction the price of anything whether it's a company or a widget is whatever someone's willing to pay for And once you understand that under that sort of psychological concept you can start anchoring into being like well we just need to tell the right story that gets people to believe in whatever valuation Sometimes it might be like a technical money thing But for most people in this space I don't believe that that's how angel investors will be most convinced to do a deal They should and then the last thing I'll say on this maybe we do one more question I know we at the hour is this is not a black and white playbook of how to do evaluation kind of like deal based too Right Larissa described a very specific situation where she was able to point to a tears deal coming in and then put a discount against something else in the future because those were tangible valuations that were coming out so she could do something that founded a little bit similar to the strategy that you were you were given I think it's much harder to do that at the very early stages where you're like look the next valuation we get is going to be $50 million We're gonna give you a 90% discount Like do I believe in that as an angel I don't know like can you tell that story that actually that you know that future valuation is going to happen If you can then maybe giving a discount will work But if you can't like you might have to take a very different path Hopefully that makes sense By the way I can stay an extra 15 I know especially the CV goes on this panel who were very generous in sharing their time You guys if you have meetings please don't feel like you should say but if you feel like this is fun for you and you want to answer more questions about your experiences would love to keep you on And by the way I can also answer the question relatively well given my exposure to these deals So let's see Any other questions that page I don't know if you saw any of that words There's a question I saw on the chat that I really wanted to answer Yeah and the rest of you if you see those two I would love for you guys to pick the ones Ok because I have so many thoughts about this So your question do you want to call the person up by the way Sure Yeah Scarlett if she's still here Scarlett are you still here I'm still here Let me come up Scarlett Kate Yeah I would love amazing What was the question Well you can yeah you say your question Yeah it was Let me read my question I think that's my question My legal team was pretty adamant and you know obviously there's some context about what's gone on already on our cap table but they were adamant about avoiding having too many small investments come in and take up space on the table prior to raising venture capital And it's that's a hard balance to strike I get a lot of offers from friends and family things like that for 10 to 15 K and we're kind of putting them on hold or saying no right now in favor of a larger raise from say an angel network which is my preference but I'd love to hear from other people about how about that And I saw somebody said can you set up an Ruv And I'm seeing other people chiming in But that that's the question Yeah I so I heard that advice too back in the day and I did what you did and said no I have a 25 K check minimum and I regret that I really regret that because in my opinion it really is you know I mean we're talking about angels right now It's primarily from my perspective like you know you're not gonna get many multiple hundreds of thousands of dollars in general from angels you're gonna be picking them up 25 K 50 K So really and it's more work to get angels frankly So what you're from my perspective the whole bigger picture strategy here is extracting value from people as well as money And so there are not there's gonna be people who you know for whatever reason maybe they're remodeling their kitchen but they're like a bad ass person that you wanna know and they're like well I can come in with 10-K I would always I mean and it depends on the person but if it's a person you wanna work for I mean there's a lawyer that I'm trying to get on my cap table for five K and I was like joking to my husband because I was like I'll pay her five K to be on my cap table because she's like a lawyer with a ton of experience in my space Like I can run up a five K bill with a lawyer pretty freaking fast But to have somebody like that on my cap table on speed dial like that's a lot of value So like you know I had people early on that I think would have come on at 1015 K and I was like no I'm gonna and it's just like that's like don't let the perfect be the enemy of the good That's like a 2021 piece of advice It's like yeah that's really nice in theory if you can get everybody to come on at 25 K I don't know why I have balloons coming off of me right now But but yeah I just like and sometimes there's like famous investors or so and like the really messed up thing is sometimes you'll hear some of these celebrities that are investors and they literally will come onto someone's cap table with like $1000 or $5000 And that's fine And people say yes because it's like it's just a paperwork thing like you'll figure that out then But really it's about do I want to And somebody said here like it's a line on your Excel Sheet Yeah like it is So it's you know sometimes lawyers like I think in their best efforts like try to advise us on like hey this would be nice in a perfect world But I'm also like I don't know about you but I don't want to say no to 10-K or 15 K at any given time especially if it's from someone I want to work with So I would take that with a grain of salt I feel like that's like good 2021 advice but not so much 2024 advice Yeah And by the way just so you know what they're probably referencing as lawyers is post closing those multiple small checks There are a lot of things that you'll have to do within your company that requires investor consent and even raising more money will require them to go will require you to reach out to each of your investors and sign off on the deal And literally if these people aren't signing it can like hold up a deal which as you get to 2030 40 investors can actually and there are always four stories that the lawyers will point to This is actually the key sales point of an of a roll up vehicle because it allows you to take the smallest check possible and doesn't give you that administrative overhead You can literally take $1000 check And I'll tell you I actually love the idea of setting rules like I have this concept of setting rules breaking them because you can go out there and be like you have a 25 K minimum you have a 25 K minimum and someone comes in and says you know I really want to invest but I really can only invest 10-K and you go you know we have this rule but you're amazing You're awesome We'd love to let you in Honestly a one K check could end up being way more valuable to Shannon Point than 100 K check Maybe they have a network work maybe they have skills that you need But I highly I would highly recommend you go back and reconsider the small check Cool Thanks for that question Scarlett and great answer Shannon Owen We're gonna we're gonna add you in here Owen What's your question Yeah hi Thank you guys very much My name is Owen OD I'm the founder of Opulence Entertainment and media entertainment company So trying to traditionally get into film and TV But leveraging technology I currently have an original TV show that I'm currently shopping and I think will be sold by the end of this month or excuse me end of April So that led me to institutionalize the creative process And I decided to raise a seed round I identified two strategic investors who I went to for a million dollars each through my alumni school network And as later on I identified three more strategic investors I then actually went to them or I'm about to go to them and actually up raise my seed round to 5 million I guess I just wanted to ask I'm still waiting on the first two to give me a decision So my idea was I went to those two first I think somebody said that earlier but essentially you know I was trying to derisk them coming in and so I wanted them to come together as a partnership and say all right you put in a million I put in a million and then you know that's how I had my seed round I guess what I wanted to ask was as I'm approaching these other three strategic angel investors how do I best optimize it or just best approach it with the momentum that I have these other two who are I'm waiting to give me a decision or at least put me into like term sheet or you know something like that while also then kind of putting the momentum on them to kind of get them to come on and you know it's a whole virtuous cycle I hope that question makes sense I have a very strong opinion on this until you have the money in the bank nobody is committed So this is also why you can't rely on anyone promising anything unless you have the money So you can say right there's urgency of conversations you know there's interest but like so there is momentum but until it's in the bank it's not committed That's why I think it's all about talking to a lot of people and keeping like the calendar density because that's how you get momentum That's how you get urgency That's how you also get the $1 million checks that now are like dwindling their thumbs because like well he's like waiting for me to like come in on the ground to actually feel the urgency to come in on the ground Like that's like my two cents I don't know if that's helpful but yeah my God I wish I didn't agree with this because that is so true And I've heard from a lot of other founders and Angels and just people in general that there's like more and more people like pretending to be investors these days I don't know if it's like shark tank effect or what but like there are definitely people out there who don't have who are who are like trying to talk the talk and cannot walk the walk and you know like signing term sheets that their butt can't cash and like beware So don't stop until it's in the bank And I hate that I even have to say that but it's really real well that wasn't my question I I'm not confused on telling them Yeah I'm not confused on if I have the money I don't have the money I know that But I guess what I'm more asking is how do you best approach like these up these next strategic angel investors that I found go with everything you have Sorry what was that I would go with everything you have right Because again if the first two fail you have nothing right So then you have I think the clean answer is the playoff with Lasa and everything was saying was what would you do if those first two investors that you talk about didn't exist That's how you should approach this next investor So go with go with that sort of strategy OK OK So there's so Nick II I feel like we're dragging people along a little bit and I wanna make sure that I have a nice clean wrapper on this These are I think these are super helpful conversation kind of a community that we want to develop here because people can listen to me people can follow V CS on Twitter But like it's really about the different experiences that founders who look very different sound very different are running very different companies pattern magically against how you might like how you were raised might be experienced I think it was super valuable So I wanted to make sure that I thank Damien and Shannon Larisa Nick for doing this like opening up opening up What you had to go through I think was very valuable to this whole cohort of people that have joined us today I did want to promote one last thing because we will be doing more workshops in the next couple of weeks We have one coming up It's our it's our quarterly two parter on fundraising strategy So it starts on March 28th and this day two is on Monday April 1st This is a free workshop It's it's out there to put out the the fundamental of the fundraising And also make sure that people know about our program fundraiser with confidence in our next cohort starts on April 10th I believe maybe 15th I think April 15th actually So anyways we would love to see you at this workshop If you guys attended this since you guys have attended this workshop you will hear about our future workshops more specific things around investor research or general strategy ones like this one And we hope to see you there Thanks to everyone We'll catch you next