Angel Funding Myth No. 1 – “You have to go to Silicon Valley to raise money”

Angel Funding Myth No. 1 – “You have to go to Silicon Valley to raise money”

I usually hear this lament from entrepreneurs who are having trouble getting traction in the local investment community. True, there is much more money available from Valley investors. But there is also much more competition for those dollars.

When you look at the data, you find that there is actually plenty of angel money in Seattle and the Pacific Northwest. Two things to consider:

First, for 2012, the local angel groups in the Seattle area reported that their members invested more than $63.1 million in 146 deals that came through these groups. (You can download the full 2012 report here.)  There may be some overlap with the number of deals, but the $63.1 million is the total that members reported to their groups.

The local numbers for 2013 are likely to be about the same, and you can find out these details at the MITEF Venture Lab event on Thursday April 3, 2014 in Seattle called “Meet the Angels,” which will feature representatives from nine local angel groups. (Note: this annual event usually sells out.)

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Second, two major reports on angel funding nationwide are also revealing. For 2012, the Center for Venture Research of the University of New Hampshire reported a total of $22.9 billion in angel funding across the U.S. The Halo Report, published by the Angel Resource Institute, reported that 6.3% of U.S. angel dollars were sourced from the Pacific Northwest region in 2012. The result: $1.44 billion of angel funding from the Northwest.

Here are several conclusions you might draw from this information:

• There is plenty of angel money in the Northwest ($1.44 billion in 2012).
• Only a small proportion of deals (probably fewer than 5%)* are funded through angel groups.
• Therefore, you can dramatically increase your chances of raising funding by reaching out to investors through your own contacts and networks in addition to working with angel groups.

Again, register now for my Funding Quest One-Day Workshop: How to Get Angel Investors to Finance Your Business on April 8, 2014. In the Workshop I cover specific tactics about how to find and connect with angel investors. Space is limited.

Best wishes in your quest for funding!

Bryan

* I found no data on 2012 deals from the handful other angel groups in the Pacific Northwest.