Business OperationsBusiness ResourcesCreative Capital AssociatesGary Honig

Only The Lonely: First-Time Entrepreneurs Need Realistic Goals for Investor Capital

Last week in Washington D.C. at the Startup Mixology Conference active Angel investor John May of the New Vantage Group expressed the need for entrepreneurs to think realistically about seeking and expecting to receive investor capital.According to Mr. May, last year only 1,000 first time business owners found a successful angel investment. And of those, 50% of them were located in two states. What he was attempting to portray is the extreme long shot a company has finding an investor. You can read an overview of the funding panel here.

There has been much talk about whether we are even in a reoccurring economic investment bubble. Will inflated valuations collapse upon themselves and cause everything in the surrounding area to fall as well?

There are some significant differences this time around: fewer deals are getting funded, but those that are will receive larger sums.

Additionally the VC industry is receiving a major shake out. Easily a third of the managed firms have closed their doors. This means the quality of deals will continue to increase while the market will still be the fulcrum on which valuations are leveraged. Here is an interesting infographic on the current VC environment.

What does it all add up to? Finding an investor to invest in your company is as difficult as ever and if you are a first timer it’s nearly impossible. But stepping into the breach are local state Economic Development agencies that are creating some successful programs that make seed capital investment available especially for inventors. Do the research, seek out opportunities.

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