Types of Investors

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Transcript

What types of investors are there? In case you don't know this already, the first round usually go for our friends and family. So people close to you who believe in your idea. And you may want to raise $50,000 by asking 10 people to give you $5,000. And there you go, $50,000 if you can't seem to do that, you can try to find a local Angel. It's an investor who, you know, might invest, you know, between $10,000 and even $3 million.

Sometimes, it's usually on the lower end, though angel investors. If you can't find either one of these, you can always apply to accelerators. I'll show you a list of them in a minute. And these accelerators will give you roughly $25,000 to $250,000 for a percentage of your company, usually between the five and 7% range. And if you're lucky enough to talk to a VC venture capitalists, they're the big guns, they're usually the ones that invest in groups, they only usually invest in millions, one to 100 million to be exact and VCs usually invest later stage. So you're not going to get your seed round or your series A usually from a VC, sometimes a VC will invest in a series A, depending on how big it is.

But if your series A is only $500,000, they might not be interested. And one thing I always tell entrepreneurs that for some reason they usually don't do is to keep track of everything, write the investors name down their investment company name, their email, their phone number, if you were referred by anybody keep this all in a spreadsheet so that you're aware of whether or not they got back to you what their answer was, then you should do some research as to what industry they're in. If you are a ride sharing app, and they only invest in health and medical apps, then they're not going to invest in you. It's very, very unlikely. Also, they might only invest in series A and you might be looking for a seed round. So you need to check that as well, and how much they invest.

Maybe they only invest 5 million or more and maybe you're only looking for 500,000 Well, that's going to be a waste of time if you keep looking for investors that are in the wrong market. You should definitely research the portfolio companies because if they've invested in companies like yours, they might be more prone to invest in your company. So again, research, research research. There's ways of doing that and I'm going to show you a couple of examples.

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