Saturday, March 10, 2007

Traction Killed a Lot of GOED Applicants

Trent, Brock and I spend a good part of our day today narrowing the list of $100,000 Funding Competition applicants from 100+ down to 20 finalists. I am amazed, but not surprised, by the number of quality businesses that applied for the competition. Congrats to everyone who applied!

A couple of observations from the selection process:

-- First and foremost, it is hard to overstate the importance of traction in raising capital from angels. Many of the applying companies had interesting ideas and capable management teams, but had made little or no progress towards making any part of their idea a reality. If you are raising money from angels, go out and do something -- sell a product, recruit a killer board of advisors, get a patent, raise money from your family and friends, get a beta tester, get commitments from a distributor, recruit a key team member ... you get the point. Your chances of raising capital will increase dramatically. All of the companies that made the final cut have done many of the these things.

-- If you are not a technology/biotech company, you can raise money from angel groups. One of the angels on the investment committee for the competition specifically stated that he and his group are looking for deals that aren't tech/bio. There are a lot more angels out there who fall into this set than you might think. Most of them have a little grey hair and made the money that they use to invest before the Internet existed. There are a significant number of finalists who don't fall into the traditional categories.

The final five will be chosen early next week. We'll announce the finalists in the FundingUniverse weekly newsletter next week.

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