Fundraising can be an overwhelming process. NEXUS strives to reduce the barriers Florida entrepreneurs face moving from the idea stage to growth & sustainability. Our goal is wealth creation for Florida companies, their teams, and our investor members.
Before getting started on your application, your team should discuss the company’s goals in order to decide what type of funding makes the most sense. Consider all of your funding options and their pros and cons.
NEXUS will showcase your venture to our most active and pertinent investor members who may be willing to lead or fill out your funding round.
Applicants who successfully obtain angel funding typically demonstrate certain key traits. Preparation and timing are key. Ventures who have evidence and traction to support the following are able to garner the attention of investors. Overwhelming uncertainty often causes investors to ask for updates and hold off on writing checks until the company shreds some layers of risk. Visit the entrepreneur guide to see inexpensive strategies to increase your venture's credibility and probability of raising funding.
Prepare your investor pitch deck (Challenge yourself to answer all of the questions on slide 32)
Find resources in your area with the Florida Virtual Entrepreneur Center.
A STRONG MANAGEMENT TEAM
An ideal management team has relevant experience and domain expertise. They understand industry dynamics, are coachable, and are fully committed to the business. Teams should have a focused plan and should be able to demonstrate that they have the ability to execute. Management teams should utilize pro forma financial statements to set realistic goals and benchmarks, and they display a history of achieving projections and obtaining critical milestones. Investors like to see that teams are realistic about their company’s critical risks and valuation. If the team is incomplete, it should recognize who is needed to complement their knowledge, skills, and abilities.
TECHNOLOGY OR COMPANY THAT SOLVES PRESSING NEEDS
Regardless of industry, teams must demonstrate market validation, ideally by earning revenue and identifying a strong sales pipeline. The company’s target customers’ adoption rate and feedback should be favorable. Teams should be realistic about their business concept and should have a plan to efficiently maximize growth.
Teams should be able to convincingly explain their plan to achieve a sizable market share in a well-defined niche. They should demonstrate a realistic vision of their market and a cost-effective sales strategy to scale the business.
HIGH GROWTH POTENTIAL
Businesses should have a large addressable market and a credible strategy for achieving growth including supporting data. Teams should understand their competitive landscape and barriers to entry. A strong supply chain is also required in order to cultivate a high growth business.
SUSTAINABLE COMPETITIVE ADVANTAGES
Ventures should demonstrate that they are unique and superior as compared to competitors – often by replacing or improving current offerings. The team should understand how to articulate their benefits and advantages to customers.
The company’s competitive advantage must be sustainable. Examples: a “blocking patent” (keeps out competition); a vanity number (1-800-WEDDING); a domain name (buy.com); “first-to-scale” advantage (can show they already are the first company to achieve some scale in a new niche).
EXCEPTIONAL RETURN ON INVESTMENT
The capital required should be in line with the potential for success and the reward for investors. Teams should be realistic about their company’s valuation and should understand potential exit strategies. Because angel investors assume a great deal of risk by investing in early stage companies, applicants should be able to make a compelling case for a 10x or better return on investment within 5 years. Ideal businesses lack capital structure issues and skeleton problems.
The company should be able to demonstrate that they have favorable timing and have the ability to make money.
USE OF FUNDS
The team should have a focused plan to maximize the investment’s impact on efficient growth. The mentoring, networking, and capital sought should propel the company to a critical inflection point and should materially increase its valuation.
IS YOUR VENTURE READY TO RAISE CAPITAL?
WAYS TO INCREASE YOUR CREDIBILITY, VALUATION, AND PROBABILITY OF GETTING FUNDING
By following the Lean Canvas and Customer Development process, you may have a greater chance of getting listened to, believed, and funded. The first step in Customer Development is Customer Discovery; extracting hypotheses from the business plan and getting the founders out of the building to test the hypotheses in front of customers.
Your goal is to:
- Preserve your cash while you turn these guesses into facts
- Search for a repeatable and scalable sales model
The proof that you have a business rather than a hobby comes from:
- Customer feedback and orders
- Users for your buggy, unfinished product with a minimum feature set
- This process even works for Life Science
Learn more by visiting: Entrepreneur Guide
The Florida Angel Nexus will not release your private information outside of our membership base without your consent. Our members are accredited investors, fund managers, and co-investment partners. Share enough information to allow members to vet and get excited about the deal without putting your company at risk.
Excerpt from the Angel Capital Association: "During the initial portions of the evaluation process, the vast majority of angel organizations will not sign non-disclosure agreements. Angel groups just see too many deals, often in a similar space. When submitting executive summaries and even business plans, the entrepreneur needs to explain the business so that the potential investors can understand the company's opportunity for success, but don't learn about any confidential issues. If you have intellectual property that has not been patented, it is best not to disclose it to the angel group when you are first submitting your company for investment. Remember that angel groups are most interested in the business behind the technology or idea they don't invest in the inventions but in the business models and management teams that will grow the companies. If your company makes it through to final due diligence, the angel group may need to research intellectual property issues and then would sign non-disclosure agreements at that time."
Companies may utilize Proseeder or AngelList if they wish for their information to be in a more public forum. The NEXUS process prepares much of the information needed for entrepreneurs to present and work with investors. We welcome co-investments. At the consent of the company, NEXUS may syndicate investment opportunities in order to raise larger amounts.
Entrepreneur Guide1) Before You Start
2) Need an Idea?
3) Ways to Increase Your Chances of Funding
4) The Lean Startup & Business Model Canvas
5) Market Research
6) Costs, Expenses, & Budgeting
7) Exit Research
8) Building a Team
9) Running Your Company
10) Applying for Funding
11) Your Presentation
13) Additional Resources