Angel vs VC Funding + Financing your Business For Growth

Hello 👋

There has been a lot going on at Female Founders Rise and we haven't written this for a while so wanted to say a massive hello to our 4500 readers!

We're back and here to share some insights from one of our most popular masterclasses on Angel vs VC funding.

(If you are not already a member join Female Founders Rise free here)

For female founders one of the biggest challenges is fundraising, finding the right investors, and knowing how to navigate the investment world.

For Mae Yip , co-founder of ERIC , a Gen Z Career app breaking down the barriers to creative industries, she has learned the hard way. 

In a recent online event hosted by Female Founders Rise with Emmie Faust , Mae shared her honest and practical insights and tips on why she decided to choose angel investors over venture capital. 

And we're going to be sharing the insights in this newsletter.

Before we do that I wanted to remind you of our upcoming masterclass this week on 18th October at 10 AM - hope to see you there > Book Here

Financing your Business For Growth

📣 Founders join us to hear about different avenues of finance to help support the growth of your business. Join us Here on Wed @10 AM

The session will help explain the routes of

1. Bank finance for cash flow and growth (Loans, Asset Finance, Invoice Finance) with Gemma Heath from Lloyds.
2. Angel investment - Sarah Touzani will be joining us and sharing her insights as an angel investor and founder of Waggle (Techstars '23)
3. Government-backed schemes - David Woods from the British Business Bank

This masterclass is in partnership with Lloyds Bank Business & Commercial

Back to Mae's fundraising journey and her key takeaways 👇

Mae’s Funding Journey

Mae and her co-founder Sam had a vision to create a tech product, however being a non-tech founder, they recognised that building her company would be challenging without financial support.

To date, Mae has raised 2 funding rounds:

⚡️ First Round: Mae raised £130,000 from three angel investors even before the official launch of her startup.

⚡️ Second Round: With an MVP and early traction, she raised an impressive £245,000 from 14 angel investors.

Finding Angel Investors

One of the biggest questions Mae often gets asked is ‘How did you find the angel investors?’, here are her top methods:

👉 Cold Emails: One of the main ways Mae found investors was through cold emails and sending thousands of them. You never know who you are going to resonate with and sometimes it’s not the obvious investors. The benefit of cold emails is you can reach a lot of people at once. It’s just a numbers game. Mae hired freelancers from Fiverr to help her generate email lists based on her specific criteria. She then uses tools like Gmass & Yam to send mass emails. She also recommends attaching a short introductory deck (5-6 pages) to showcase your product/brand.

👉 LinkedIn Presence: Mae is a huge fan of LinkedIn and building a strong LinkedIn presence. Make sure you’re actively posting and engaging on LinkedIn weekly, even if you think no one is interested. Consistent branding and visibility can make a significant impact when seeking investors.

👉 Founder/Investor Referrals: Trust plays a huge role in investment decisions and so asking other founders and investors for introductions to potential investors is a great way. Don’t be afraid to ask.

👉 Family & Friends: As female founders, we often don’t ask for support. When it comes to fundraising don’t hesitate to ask family and friends for investment. They are often more willing to invest in your vision than a stranger. There are also new ways to invest so that family & friends can invest much smaller ticket sizes. Check out Odin .

👉 Angel Syndicates: To reach a lot of angel investors at once, angel syndicates can be a good option. These groups can offer really good processes and experienced guidance. There are also more and more syndicates being created!

Why Not Venture Capital?

Here are some of the reasons Mae chose angel investors over VCs:

👉 VC Alignment: VCs often have specific business models they prefer to invest in. It's essential to understand that it's okay not to fit their criteria. Educate yourself on how VCs work, it will help you understand why your company might not be a good fit.

👉 Control Over Your Vision: VC involvement can sometimes mean a loss of control, with investors wanting to make significant changes. One VC asked Mae if they would change their company name!

👉 Emotional Investment: Angel investors often invest with their hearts, believing in the founders' vision and the mission of the business. It’s so important to find the right investors and those who you can be open and honest with. Mae’s pitch resonated so much with an angel investor in just one call, resulting in a £70,000 investment. 

👉 There are more Angel Investors than you think: There are thousands of angel investors, compared to a limited number of VCs. 

👉 Time and Energy: Raising money from VCs can be all-consuming, leaving little time for other essential aspects of running a business.

👉 Capital Efficiency: Do you really need to raise millions of pounds? Raising less money forces entrepreneurs to spend it more wisely, driving them to make strategic decisions that align with building a sustainable business.

Biggest Tips for Female Founders

Mae ended the session with some valuable tips for aspiring female founders:

• Create FOMO: Use strategies like announcing that the funding round is closing soon to generate a sense of urgency.

• Focus on Traction: Investors are more likely to invest in a startup with tangible results rather than just an idea.

• Listen to the success stories of other founders: Exited founders like Timothy Armoo and Nick Telson never raised from VCs, so be inspired by their success stories.

If you want to connect with Mae Yip , add her on LinkedIn.

Love to know in the comments your thoughts on this newsletter, and if we're not already connected come and say hi here on LinkedIn Emmie Faust and follow Female Founders Rise for updates on what we are up to.

Have a wonderful week

Emmie

📣 PS Female Founders, Investors, VC, and Supporters join our community here > ( join Female Founders Rise free)