I keep getting approached by entrepreneurs who have not done the basic steps before trying to raise angel funding. I thought it may be useful to put down a basic checklist. My checklist follows.
1. Incorporate the company that is seeking funding
2. Get a good law firm and have basic documentation in place
3. Put some of your own/friends/family money in the company
4. Use that money to build something, get advisors, customers or atleast expressions of interest
5. Build a team. Part of the team may be angel employees
6. Be clear on how much money you want to raise and how will you use it to get to the next level
7. Think and articulate possible exits
8. Put yourselves in the shoes of the angel investor and make a pitch to yourself
I have yet to see a pitch for angel investing that is excellent but I am sure I will see some soon.
I also see that there are a lot of folks very clueless about the bisics of venture funding. They are starry eyed and dont understand the dynamics involved. They are not even aware that cost of capital is highest with VC funding. They ask what is cost of capital!