Finding Angel Investors In Texas
By Kevin Vela
One of the most common questions I get from my startup clients is, “Can you help me find investors?”
The answer is always a very lawyerly, “Well, yes and no.” I generally hate it when people say that, but it’s an honest answer.
First of all (and I’ve written about this before),
if you’re a baby startup, you should be able to raise $50k – $100k on your own. That’s simply the expectation around Texas. This money should come from your own savings, friends, family, and your personal network. If you can’t get the people who know you the best to invest money, or if you’re not willing to put your own money into the company, how would you ever expect a total stranger to invest in you? Let’s be clear, when people invest in a startup, especially early on, they are investing in you, not the idea. Angel investors want to see that people around you believe in you enough to put their hard-earned cash up. VCs, when you get there, will want to see that angels have vetted and invested into your company.
So if you haven’t yet raised any money on your own, the likelihood of VW introducing you to someone who wants to invest is slim to none. And I’m pretty sure that any law firm would tell you the same.
If, however, you have done that initial friends and family round, the next step is likely an angel network. We’re blessed in Texas to have a host of active angel networks. I’ll list them here and I encourage you to reach out to see what their pitch steps are. Some charge to apply, which some people don’t like, but I don’t have a problem with it. It’s usually a nominal fee and those things aren’t free to run. I’ve seen all of the groups below invest into clients of VW, and I believe in them.
In alphabetical order:
- Aggie Angel Network
- Baylor Angel Network
- Central Texas Angel Network (one of the most active angel groups in the country)
- Cowtown Angels
- Foodshed Investors (supporting sustainable food and agriculture startups)
- Houston Angel Network (these guys are very, very sharp)
- Keiretsu Forum
- Lone Star Angels
- North Texas Angel Network (been around forever, very experienced guys, they love to get hands-on)
- Southwest Angel Network (focused on “impact” investing, i.e., social and environmental startups)
If you are successful at finding an angel investor (and especially if you are unsuccessful), don’t stop there—your next goal should be applying for a reputable accelerator. An accelerator will help accelerate your startup by providing the right training, resources, and network needed to grow your company and meet the right people. The application process can be very competitive, but if your company is accepted, the track usually lasts around one to three months and often entails ongoing, and even lifetime, perks. Below is a small list of notable Texas accelerators:
- Capital Factory
- RevTech Ventures (focuses on retail technology)
- SKU (focuses on CPG, or consumer product goods)
Now, once you’re past the Angel stage, you are likely ready for a VC, or close to it. We keep a rolodex of VCs around the country who are looking for deals in certain industries. Ask your attorney or CPA for similar introductions. And don’t be afraid to cold-call them. It’s their job to review decks.
A few tips on VCs:
- Reach out to them before you are ready for them. “Hi, here is what we do, we just raised a seed round and are going to accomplish XYZ in the next 6-12 months. Is it okay if I send you monthly updates to show you we’re on pace?”
- The best time to ask for money is when you don’t need it. This is obvious, but there’s nothing more attractive than a startup who can say, “Nah, we don’t like those terms and aren’t starving for cash, so we’ll pass.”