Finding early money for an emerging natural product brand is hard. It is sure to occupy a disproportionate amount of your time as a founder. So, get used to it and good at it if you want to succeed.
There is a funding gap that exists between friends and family and venture capital. It is a gap, in my opinion, that is growing. It is often referred to as the “valley of death,” and it spells the demise of many a brand. The size of the average VC fund in the natural products space has been increasing. The economics of that increase require that bigger checks be written. Those checks are far more likely to go to brands that have revenue over $2MM to $3MM trailing twelve, proven velocity and a strong tribe of followers. This only makes raising capital harder for early-stage brands.
In most cases, this means that the capital you’ll raise will be from angels. So, how do you find them? There are some high-profile angels in the industry, but they see hundreds of opportunities each year and invest in very few. You will need to unearth your angels who are called to your mission, share your vision, and believe in you. Here are three hacks you can use to find your angels:
This is a powerful tool for angel discovery. I would encourage you to invest in LinkedIn Sales Navigator. Use the advanced search features to build a specific query based on industry, geography, keywords, and more. There are some other add on tools like “Meet Leonard” that help to automate connection requests, follow-ups, and notifications. I’ve worked with many entrepreneurs on just this, and they’ve been successful in identifying hundreds of potential angels.
2. Future funds
You’re always raising capital, even when you’re not. What I mean by this is that the best time to look for money is when you don’t need it. One thing I always suggest is to start your outreach to the funds that you are too early for now but are the ones you hope will be interested in you in the future. Making them aware of your brand is essential as it helps to have an established relationship when the time comes. But, another benefit is they typically have a pretty good list of angels. So, when they tell you that you’re too early, thank them for their time and then ask them if they’d be willing to introduce you to some investors.
3. Be different
When you do start your outreach to investors, stand apart. Don’t just send an email with your deck or executive summary. Try recording a video message to include in the email. Send them samples, with a handwritten note. Here is a totally radical idea, call them first. Whatever it is, do something that creates a point of difference. You need a hook to get them engaged and willing to move the process forward.
Nothing above is rocket science. However, it could make all the difference in getting the capital needed to get your brand through the valley of death.