Unusual investor in my product
Written by John Teel.
By this point in my journey, I had bootstrapped my product to being on shelves in over a 100 retail stores.
It was also around this time I discovered I should have been focusing a lot more on marketing, which I had completely ignored.
So, like many entrepreneurs, I convinced myself I needed money for a marketing campaign.
I had also talked myself into the need to develop more product versions so I had an entire line of products available.
But this was more money than I could fund myself, so I decided to raise outside capital.
How hard could it be especially since my product was already on the market?
I just needed what I thought was a low-risk investment to scale my business.
Like anything new, I soon learned it was a lot harder than I thought it would be!
Ever experienced that before?
Seeking outside funding required all of my focus since I was still a one person operation.
I connected with everyone I could on Linkedin, hoping to find an angel investor.
But I soon learned that wealthy people don’t just give away money to random people on the internet:)
Shocking, I know!
You almost always need a personal connection to them.
Next, I decided to pitch my product to a local angel investors group.
Angels are just rich individuals who invest in very early startups. They tend to have groups in most bigger cities.
For me, that was actually Honolulu, because we were living in Hawaii at that time.
The pitch event was at a beautiful setting right on the ocean, but I was too nervous to enjoy it.
This was the first time I had ever pitched my product (or anything, really) to a room of people.
Honestly, I just wanted it to be over.
I was so nervous and sweaty as I looked out at the room full of aloha shirts with the people in them judging me and my product.
I hated doing this type of thing so much, but I was also determined to do anything to succeed!
The presentation itself is mostly a blur, just like my presentation to Blockbuster Video executives a year earlier.
Ultimately, the angel investors were impressed I’d made it so far with my product, but I wasn’t yet profitable and they didn’t see the vision I had for my product.
Total investment = ZERO. Time wasted = TOO MUCH.
That was a big failure, and I felt so stuck.
But soon after, one of the sales reps I was working with told me that he was good friends with the granddaughter of the founder of Rice-a-Roni.
Hmm. Okay, that’s interesting, but what’s the point?
Then, he tells me he’s been talking with her about my product and the progress I’ve made.
Apparently, she was impressed.
Now, I’m really interested!
I even became a little obsessed with Rice-a-Roni, thinking this random woman may be the savior I needed.
Although I hadn’t eaten it since I was a kid, I quickly went out and bought a couple boxes of it.
But, buying Rice-a-Roni and pitching angel investor groups, was not what I should have been focused on.
First of all, fundraising is a full-time job and it completely distracts you from running and improving your business.
My business ended up being neglected while I spent 6-9 months trying to convince rich people to give me lots of money.
Ultimately, all I got from Rice-a-Roni was a couple boxes of rice, and I never did get the heir to the fortune to open her wallet.
She felt I needed an investor with knowledge in my market, which she had none.
Turns out, most angel investors want to be involved in your startup, and to ideally use their expertise and connections to give it a boost.
Around this time I befriended another local entrepreneur who had lots of connections with angel investors in Hawaii.
He was impressed with me, and eventually introduced me to a well known angel investor.
After meeting him, he told me he was interested in investing.
I was ecstatic! Well, at least, briefly.
As our discussions progressed I came to these realizations:
1) He wanted more than I wanted to give.
2) I’ve been ignoring my business for too many months.
3) I didn’t need big funding, I just needed to slow down my expectations.
4) Money (especially from other people) entices you to take dangerous shortcuts.
After wasting nearly a year of time trying to raise funding, in the end I decided this was NOT the right path for me.
There were many things I was still trying to figure out, like especially my market messaging, and money to scale up is best AFTER you figure these things out.
When you still have lots of unknowns, it’s best to keep your budget low and to keep testing until you figure out what works.
