Four reasons why having too many angel investors can be problematic

Recently, the New York Times published a popular post about the right number of angel investors for startups. "How many angels is too many?" went viral and offered useful insights into this hot form of seed investing.

While it makes sense that 20+ investors is too many chefs in the kitchen, it’s understandably difficult to say no to money and potential big name angel investors. When you’re a fledgling startup, can you really afford to turn down opportunities? To answer this question, it’s worth examining the potential danger of having too many angel investors. Here are four reasons you’re better off saying no to some of these so-called opportunities.

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5 steps to raise capital from angel investors

After developing your MVP (minimum viable product), many startups need outside funding to get to the next phase. You may need funds to refine your product, or you may need moneyto launch the product and gain traction.

The common approach for entrepreneurs at this stage used to be to seek funding from banks or venture capitalists. Unfortunately, banks are unlikely to offer loans to startups without very strong revenues or collateral, and venture capitalists rarely invest in companies that haven’t already developed a product with some proven market viability.

As a result, if you’re still in the pre-revenue phase, angel investors may be your best option for raising money. But who are these wealthy individuals, and how do you go about finding them?Read more


Funding roundtable Q&A: investors share what it takes to raise capital

Last week, we co-hosted a webinar with VentureBeat that took a deep dive into funding options for techn companies at different stages of growth. The panel featured BJ Lackland (Lighter Capital's CEO), Claire Lee (Silicon Valley Bank’s Head of Early Stage Banking), and Erik Benson (Managing Partner of Voyager Capital). It was a wide-ranging conversation among three leading investment experts about the changing funding landscape and what entrepreneurs need to think about when deciding which funding path makes the most sense for their business.

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How to pick high-quality angel investors: five things to look for

Angel investment can be a useful and indispensable financing option during the very early stages of starting up your company. But be aware: not all angel investors are the same. The range of quality among angel investors is massive—and can massively impact your company. Lighter Capital is often the first source of institutional financing after angel investments and boot-strapping and we have worked with many entrepreneurs who didn’t always get what they bargained for from their angels.

Sometimes amassing capital from any source can be tempting. But it pays to do your research and know the kind of investment partner you want to take on for the long haul.

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