Startup Diaries: 7 Tips for Seeking Angel Investment
A chance event led Genevieve Murphy and Kate Barry to be approached by high profile angel investor William Reeve. The two Founders of Trinkets tell The NextWomen what impact he has had on their business and share their 7 tips for those seeking an angel investor.
Our first encounter with William Reeve stems from a great story about being in the right place at the right time. I was attending a free marketing week put on by Start Up Britain and during questions they encouraged the audience to state their name and company as the entire week was being streamed online. On the last day, I asked a question and a business friend of Williams was watching and went on to Google Trinkets. Discovering it was a subscription based business, she forwarded it to William and he got in contact with us.
We did our own Google search on William before we agreed to meet.
When we discovered he was one of the original founders of LoveFilm, it was a surreal moment to then think we were getting the opportunity to sit at the table with him to talk about our subscription business.
I think what resonated with William was the fact we were operating a subs business selling physical goods, which is a different proposition than a subs business selling digital content or mobile services over the air.
At the time we met, we were four months in from launching Trinkets. This especially helped with the first conversation given we’d already established a brand, sourced the product, customers, revenue and a technology platform that was custom built with integrated billing, CRM and stock control. It was also all our own IP which certainly helped us with the evaluation. The other advantage we had from already launching at the time we met William was having customer data which meant we could discuss the metrics and modelling for a subscription business. Looking back, this added to our own credibility and I think he was able to see that Kate and I were experienced in subscriptions and technology and very much understood the business we were running.
We had a series of meetings over the next few weeks and William made an offer to invest in Trinkets.
Kate and I sat down and worked through the reasons for taking or not accepting the offer, but it’s not surprising the positives far outweighed any reason not to take the early stage investment.
We agreed quickly on the terms and it was a seamless process but we made sure we had the terms checked by a lawyer and spoke to a few trusted sources to get a second opinion. A lot of our decision was based on our ‘gut instinct’ given that we liked William from the very first handshake and we could see very early on that entering a business deal with him was going to bring way more than just money for Trinkets.
Following the deal, we met with William once a month for a breakfast meeting which became our monthly board meeting.
Agreeing to take investment forced Kate and I to quickly adopt a rigorous structure and reporting as we would present the position of Trinkets.
It was like our own mini incubator as he would offer expert advice on all areas of the business from postal packaging, to marketing campaigns, technology ideas and customer metrics.
Having access and regular meetings with an experienced entrepreneur and Angel investor has been invaluable. Not only have we grown in our knowledge and expertise but we’ve taken on board the advice to develop the ammunition to defend our business plan and idea. This has without a doubt resulted from William taking apart our ideas and challenging us on why we were doing things a certain way.
We didn’t always agree, but the lesson was that we always listened, had good answers and validated reasons if we did not agree on something.
We have since explored taking further investment and we are currently crowdfunding on Seedrs. The preparation to take further investment has been a completely different experience having undergone the angel investment process with William. He’s been instrumental in the knowledge transfer about investment and what to look for and what to avoid. The advantage of working with an Angel investor who is generous with their time and expertise is they open doors and make introductions to other investors and connected experts who can add value and advice.
It was a turning point for Trinkets the day we met William Reeve and if you have the opportunity and the conditions are right to work with an experienced entrepreneur/Angel investor, leap at the chance and nurture the relationship; your business and own self development will thank you in the long run.
Seven tips when considering Angel Investment
1) Be clear about what problem you are solving so you can explain this in 30 seconds to a potential investor.
2) Have a clear understanding of the position and stage of your business. We were at early launch, but had enough customer data to understand our metrics to discuss this in a meeting which added value to the conversation and validity of the product offering and business model.
3) Know your numbers and where the revenue is coming from.
4) Have good answers, be prepared and be an expert in the products and industry you're selling in.
5) Be honest and genuine; investors will spot a mile away when you’re covering something up. There’s no value in this; they have sat in the startup seat before. Plus the relationship is built on trust and this is key when it comes to signing a deal.
6) Walk into an early stage investment meeting with an evaluation in mind so you are comfortable and informed about discussing this when the topic comes up.
7) Respect the person you are looking to invest with and try to identify where else they can add value other than the money. Mentoring, strategy and general business guidance can add a lot of value to business owners.
Trinkets is currently looking to raise £165,000 in seed investment through equity crowd-funding platform Seedrs. The money raised will be used to drive customer acquisition, marketing, add a new line of products and new packaging. We are inviting investors from all backgrounds to invest, but are especially keen to see female crowd investors support a company for women, funded by women. More information can be found here: https://www.seedrs.com/startups/trinkets
The two Australian founders of TrinketWomen, Genevieve Murphy and Kate Barry, are professionals who have experience in complementary areas, covering management, strategy, finance, marketing and operations. They both have over 10 years’ experience working for mobile content technology startups (iTouch, Jippii, Pitch and Playphone) based in the UK and Finland. Their expertise includes the identification and pursuit of new business opportunities on a global basis resulting in rolling out subscription services in 18 countries in less than two years. Genevieve has a Bachelor of Applied Science from Royal Melbourne Institute of Technology and Kate has a Bachelor of Commerce from The University of Melbourne. Both possess entrepreneurial passion to evolve commercial opportunities.
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