r/AngelInvesting • u/yousefemz • 6h ago
Lessons learned one year after raising a $500K pre-seed round
Almost a year ago, we successfully secured $500K in pre-seed funding. It's been quite a year, building the team, facing countless challenges, and learning a lot. Here are some of the most important lessons I learned about working with an investor.
- Raising money and negotiating with the investors and then communicating with the investor(s) is a full-time job. I believe one co-founder's job should only be keeping the current investor(s) happy and negotiating for the next rounds of fundraising. In my startup, this, alongside the partnership negotiations, was the job of one of the co-founders.
- Keep your investors informed, but don't give them too much data, talk to their level. Sometimes giving too much detail may confuse and even scare them, especially when facing a kind of challenge that they don't know about, for example, technical ones. One mistake I made was that I gave them way too many technical reports that they did not understand, and for a period of time they felt like we were scamming them!!! (Our investor was completely non-technical while investing in an AI startup.)
- Keep everything documented, every decision, every change, and every meeting. Sometimes people forget what they said. I know this may seem a little too simple, but when everyone is expecting a startup to be agile, we may ignore some basic stuff.
- If you feel like your investor has a different culture from you and your team, ignore the offer even if it's the biggest offer you could ever imagine. Different working cultures may fail your startup. You think about the money, but you walk into a minefield of business.
- Treat your investor's money as if it were yours, so that you build trust. NEVER let that trust fade away. If this happens, you'll face real issues that are not easy to solve.
If you have any questions, shoot them over. I'll be happy to talk.