🤯 Exposing the top reasons for fast angel investment rejections

[@FeeltheBoot]

Looking for more startup info/advice? Try our website FeelTheBoot.com 🤓

[@nat.serrano]

I would have rejected this guy. 3 freaking minutes of saying nohing

[@fredster100x]

😂

[@Anwar-AT]

😂😂😂

[@BinkkDoesStuff]

The best current video out there regarding this topic. Thanks boss! Definitely going to reach out

[@FeeltheBoot]

Thanks! Please do!

[@TuralHuseinov]

means that you need to search more

[@MrClockw3rk]

I think it’s worth noting that most businesses in existence do not make sense to venture fund. That doesn’t conflict with the message here. It’s simply a separate argument. Many modern founders are inclined to think about their potential business models in terms of venture funding, and that bias can lead to worse individual results.

[@FeeltheBoot]

Absolutely!!! I talk about that in many of my episodes. Most startups aren't venture-fundable, and even if they are, they might be better off pursuing other options like bootstrapping, debt, grants, etc. For example, here's an episode on how VC kills startups: kzbin.info/www/bejne/eICXZYxjppyGm9E

[@Rakibrown111]

Don’t worry guys, he would have flat out turned down Facebook, Uber, Amazon, SpaceX, Tesla and probably Apple in the startup phase. This is very anecdotal and specific to this investment group, the only thing they all have in common is that they want to make money, period. How you convince them your idea does that is up to you and you can tailor your message to them

[@FeeltheBoot]

The point is to avoid the quick no based on superficial analysis so you have a chance to shine. Almost all investors have too many deals to look at all of them in detail.

[@claritymedialife]

Great content. Having gone blind into my first investor pitch this topic was exactly what I needed. Just joined Feel the Boot and ready to grow.

[@FeeltheBoot]

Awesome! Let me know how it goes!

[@winwinsri]

Thanks for another Excellent Video - Some times you are brutal but we got the point. - Please do more such topics and Enlighten us.

[@FeeltheBoot]

Thanks! The reality of startups is rough, and founders need to understand what they are getting into and where the landmines are hiding.

[@PeterGuzzardo]

I can feel the boot! Mostly on my neck 😂Love your advice. Clear concise and to the point. In my experience, every individual wants to see different elements in a presentation deck in various orders. There is no standardized form. So the way I navigate around that Obstacle is by doing my research on each individual and restructuring my presentation accordingly before sending out. I have been following Feel the Boot long enough to get the impression you are interested in seeing more detail even in a teaser deck then most. Does that sound about right?

[@FeeltheBoot]

I like your approach! I don't really like teaser decks. I want enough information to have confidence that I do (or don't) want to hear more about that company. Teasers rarely give me enough, so I default to no.

[@PeterGuzzardo]

@@FeeltheBoot thanks for your quick response

[@marklewin8426]

Great advice, thank you for taking the time to create the presentation.

[@FeeltheBoot]

My pleasure!

[@surunitemiakanni-oye4346]

Thanks for all the info. Certainly helpful for the future

[@FeeltheBoot]

Glad it was helpful!

[@kobyschmitz6775]

Hi Lance, Thanks for the informative video! What are your thoughts on the advice I've heard from other investors to leave valuation out of your pitch deck and wait to receive offers?

[@FeeltheBoot]

In general, I agree. Your lead investor will negotiate the valuation with you. After that, you would show the negotiated terms.

[@sguploads9601]

intresting that this video is actually most viewwed on channel. say a lot that lack of feedback from angles is actually important.

[@FeeltheBoot]

Absolutely! Investor mindset and decision-making processes are opaque and confusing to most founders!

[@Power_On_Technology]

I'm starting up a new business how to properly set up my pitchbook what I would need for an MVP and how to get precede funding to produce my MVP. I haven't watched all of the video yet but I will be watching it and I have subscribed just simply because you interact with your followers

[@FeeltheBoot]

The MVP needs to be functional and deliver value to your customers. It might be rough, and could be missing features, but it must be worth buying. I did an episode on pre-MVP fundraising kzbin.info/www/bejne/iIWcZpJnar5-g9k

[@daverobau9656]

Good advice - but converting an LLC to a C Corp takes 60 days and maybe $2K. Seems like a silly reason to reject an otherwise investable company

[@FeeltheBoot]

In my experience, it only takes a few hundred dollars and a few days. As an investor, I want to make sure of your corporate structure before I write the check. After that, I have very little influence and you might do something problematic for me.

[@markusthurman877]

We offer that type of service, converting from LLC to c corp. and we charge $198.. takes only a few days. I own a legal tech company (c corp)

[@IOFLOOD]

What if it's an S corp? Pretty sure changing that to C is just one checkbox on a tax return.

[@testymann5045]

​@@FeeltheBootLittle influence? I think you invested wrong if you have such little influence.

[@FeeltheBoot]

@@testymann5045 If you only take a few percent of the company, you don't have much leverage (nor should you).

[@ktempest]

Would a non-Delaware C-Corp raise any red flags or even eliminate a company? (Arizona, Nevada)

[@FeeltheBoot]

It is not a deal killer, but will raise questions. Make sure you have a good answer for why you made this decision. It probably won't come up until due diligence, but it will likely be noticed.

[@wetmoreperugupalli]

Das war wirklich aufschlussreich!

[@ErikJaniszewski-p1m]

Very informative video. I've been watching your series and I'm going to sign up for your office hours. I'm hoping you can clarify your position on point #6. Specifically around the unit economics and growth metrics of a business. My understanding is those questions are fitting for a series A and beyond, but the pre-seed and seed rounds are so early that either metrics don't exist and/or any numbers supplied would be complete guesses. What is your take on this thinking?

[@FeeltheBoot]

You can usually get quite a lot of that kind of information, even pre-revenue. If you are a hardware company, I would expect even a pre-MVP startup to know very accurately their Bill of Materials (BOM) and what it would cost in small and large quantities. I would expect any startup to have done enough experiments to have a reasonable sense of the Customer Acquisition Cost (CAC) or Cost of Sales (CoS) from performing some inexpensive experiments. Some of these numbers will turn out to be wrong once you have grown enough to be doing your A Round, but you should certainly be able to provide some indication of the likely values based on testing.

[@ErikJaniszewski-p1m]

@@FeeltheBoot Awesome! Thanks for getting back to me.

[@Cbsingh-v1q]

Good morning Sir: real solid advice. Me and my friend are building a software based on Machine Learning. What it does is, it tries to predict success of ad campaigns using social media data. What are the things we need to have in place, for successful investor meeting?

[@FeeltheBoot]

I would want to see the solution working. Data showing your predictions are accurate. And either some early paying customers or people who have expressed a clear interest in buying the solution. You should conduct at least a dozen customer interviews and have a good sense of the value to your customers, appropriate pricing, and how it will integrate into their workflows.

[@Cbsingh-v1q]

Thank you Sir

[@BrettFogle]

What about a Delaware S Corp.? Why is a C Corp. preferred thanks.

[@FeeltheBoot]

Investors don't want the extra tax complexity and the potential cost of a flow-through entity like an S-Corp.

[@anthonygibson3709]

Thanks for this. It felt honest.

[@FeeltheBoot]

Thanks! I want every founder to have their best chance of success. It stinks when a company fails for reasons unrelated to their core business.

[@alihassan-zd3nx]

Very valuable .thank you

[@FeeltheBoot]

Glad it was helpful!

[@Power_On_Technology]

Would you recommend a c-corp over an s-corp and what are your opinions on the two in regards to each other

[@FeeltheBoot]

If you are looking to bring in investors, then you absolutely want a C-Corp. Otherwise, it is a tax question, and the answer would depend on your specific situation.

[@Stravia123]

Lol. Youre an Angel. At pre seed you should only look at the founder, not the deck. Can’t think like a VCs when ur Angel.

[@FeeltheBoot]

I don't get much about the founder in one minute. How do you evaluate the founder in that amount of time? What is your approach to quickly eliminating 80% of the incoming asks?

[@testymann5045]

@Stravia123 Cogent comment.

[@Stravia123]

@@FeeltheBoot first impressions and last impressions, and by adding social strain to see how they react when you mentor them. The best founders will give you 10-20 startups, not just 1. Only invest in those you imagine working with for 20 years.

[@williamcain3074]

Thank you for your video. How would I find a local angel investor group to possibly join?

[@FeeltheBoot]

I would start by looking at angelcapitalassociation.org/ They have a list of almost every angel group operating now.

[@JustMe99999]

@@FeeltheBoot Thats a super helpful list - thanks for posting that.

[@laralara5193]

Thank you.

[@FeeltheBoot]

You're welcome!

[@plaumarbusiness6244]

love it, thanks :)

[@FeeltheBoot]

Thanks!

[@useconomyvsswitzerlandussw3025]

Hi am from switzerland would like to become Angels investor but in USA

[@FeeltheBoot]

Many groups support remote members over zoom. You can see a list of most of the angel groups in the US at angelcapitalassociation.org

[@p3idtechnologiesinc.691]

Seven good tips for NOT getting your companies investment opportunity put in the trash bin!

[@FeeltheBoot]

Exactly!

[@christianburke418]

I invented an energy machine, that when combined with a Power Station can supply off grid electricity. I have not finished setting up the manufacturing system, but in the future an Angel Investor might be a perfect fit. Many have offered to lend me money, but I would prefer an investor who wants to be more involved and has the intuition to understand the potential of the SphereMotor. This video gave me a lot of good information. SphereMotor, the future of electricity

[@JustMe99999]

What you're proposing goes against the laws of physics lol... you can't output more power than what you put in.

[@christianburke418]

Christian here, from SphereMotor. I no longer want or need investors. I've decided to play the long game.

[@rickhmason]

Sorry Mr. Zuckerberg. A Florida LLC? Sorry kid, pass😂

[@FeeltheBoot]

I have no doubt that my quick elimination strategy causes me to miss many great opportunities. However, I can't look closely at every company. In my experience, the vast majority of appealing investments (in the US) are Delaware C Corps. Most of the other criteria are also somewhat arbitrary. I need some way of quickly focusing on just the most likely startups for detailed consideration. The point of this video is to help startups avoid getting filtered out for reasons unrelated to their underlying quality.

[@rickhmason]

@@FeeltheBoot I was teasing. But for every rule you need to know there are times you need to break it for exceptional founders. Great content!

[@lidiaisrayelyan7462]

I have an idea and i have the business document of application how to provide the subscription, services-based, fixed fees?

[@FeeltheBoot]

Can you share a bit more about your solution? It is hard to know what would be best without more context.

[@markansu6137]

This is it.

[@FeeltheBoot]

Thanks! It is the hard reality.

[@bazgo-od7yj]

#5 applies to most of the "AI" related startups I've seen. Seems like too many companies are just injecting fine-tuned LLMs into existing processes and pitching it as something new, when in reality it's fairly low effort. Especially in the business intelligence field🙄. This is just my opinion at least, maybe I'm just a negative guy. My question is whether you think that the current AI investing craze is taking all the oxygen out of the room for software startups that use traditional algorithms to solve problems instead of AI. Is it now a requirement to have a large language model incorporated somewhere in your product?

[@FeeltheBoot]

I completely agree with your observation! LLMs with access to restricted data or training have potential. Skins on existing LLMs are doomed. The key is always results, not methods. If you produce better value using something other than LLM, that should win. I suspect LLMs will be at least part of almost everything in a few years. Startups won't brag about using AI because it will be basic table stakes. It would be like saying, "We have a website!" now.

[@bazgo-od7yj]

@@FeeltheBoot Do you have a technical background?

[@FeeltheBoot]

Yes I do! 🤓 I dropped out of my Ph.D. in Astrophysics with a 2/3 written thesis to found Anonymizer.com.

[@sguploads9601]

i personaly belive there is not enought such companies - it shoudl be 10k+ compaines who impliment AI right now to all process possiblу - ис benefit is usually huge.

[@FeeltheBoot]

@@sguploads9601 I agree that almost all companies should be leveraging AI and LLMs. However, there needs to be more to the company than a wrapper around an existing model. That is far too easy to duplicate.

[@mrMacGoover]

Your based ou of North Bay Canada?

[@FeeltheBoot]

No, north of San Francisco Bay.

[@mrMacGoover]

@@FeeltheBoot Okay, I'm in Ontario Canada, thank you though for you quick response .

[@FeeltheBoot]

You might look at www.angelonenetwork.ca/ or northernontarioangels.ca/

[@Mrcostavi90]

Ohh those companies, who's established in Delaware and trying to sell their product in Mexico 🤣🤣

[@FeeltheBoot]

Exactly!

[@michaela.178]

When I see videos like this one, I'm mildly disgusted. This is not advice! I'd put it on the sheer arrogance shelf. Having talked to a number of investors, I can tell the difference. Only a fraction of all pitches will get invested in - we know, and there's no initial threshold that spares investors from the less investable proposals, so they get a lot of these. But whining around about the burden of reviewing other people's work - well, that's your job description. In the end, angel investors seek to make a profit. Reviewing pitches is not charitable work, and investors are responsible for their own deal flow. If sitting around and waiting for pitches is your model - go with it, but spare us the whining. There are plenty of videos that give very valuable and actionable advice to pitchers, and being a bit clueless is ok. Pitching startup ideas is not what founders usually do - they should be all about building their ideas.

[@FeeltheBoot]

Did you actually watch the video??? I am not complaining about reviewing companies. I am trying to help founders avoid quick elimination as investors make that first pass through the slush pile. Which of these things do you think are NOT issues that get companies quickly rejected by most investors? Are there things here you think founders should not worry about? It seems that you are reacting to the title/thumbnail rather than the content (which is your perogative).

[@FeeltheBoot]

Did you actually watch the video??? I am not complaining about reviewing companies. I am trying to help founders avoid quick elimination as investors make that first pass through the slush pile. Which of these things do you think are NOT issues that get companies quickly rejected by most investors? Are there things here you think founders should not worry about? It seems that you are reacting to the title/thumbnail rather than the content (which is your perogative).

[@michaela.178]

@@FeeltheBoot Unfortunately, I even re-watched a part to be sure. With minor exceptions, like the C-Corp part, you are not giving actionable advice. A founder trying to land "some" startup thing might be flexible in all directions and produce alternative pitches in rapid succession. A genuine founder will be locked into one idea at a time, which might be more or less investable. Those pitches might A) be not fixable, B) be not your investment category, C) require pivoting to be investable, D) require re-dressing, or E) be straightforward investable. There is no constructive advice you can give to A) and B). C) and D) have nothing to learn from your video except your attitude. There is way better content out there that is genuinely helpful, and some of the topics you've touched like valuation, are to such a degree subjective (and vaguely presented) that either you see the potential and sit down together to fix it - we're talking about angel investment here, or you send those candidates to the next investor. Investors themselves are responsible for efficiently managing their funnel, and if you're feeling overloaded with A) and B) - that's your problem, fellow investors might show some compassion. On the risk/profitability side - above some reasonable threshold, your risk appetite reflects your existing portfolio. Either it's so good that you don't need to go subpar or it's rather not and you must play it a bit safer. This video is mostly about you and your funnel - little to nothing to learn for founders.

[@FeeltheBoot]

@@michaela.178 thanks. I will take your feedback into consideration in future episodes. I am currently working on #106.

[@michaela.178]

@@FeeltheBoot Chapeau! I am confident there will be fans.

[@Powner187]

Dang, not much is gonna give you 50x in 5 years.... lol. These are devil investors.

[@FeeltheBoot]

About 1 in 20 startups with high growth potential and large market opportunities hit that benchmark. That is how the VC model works. Because of the high failure rate of startups, if the winners don't deliver those kinds of returns, then the investors are losing money over all (and thus would leave their money in the public markets). It's not reasonable to ask investors to be charities.

[@Rays_Bad_Decisions]

Ya 50x is completely insane even angels are only hoping for a 20x at best. A lot of investors set you up to fail so they can seize the company after you poured your time and blood into building it. Watch out for predators like this.

[@FeeltheBoot]

@@Rays_Bad_Decisions what can I say, the potential for 50X is what I hear from many other investors. I don't understand your point about seizing the company. Unless you have agreed to extremely hostile terms, the shareholders are not in control in the early rounds, and probably no single shareholder has a majority later. I have a whole episode on investment terms you should look out for kzbin.info/www/bejne/gnSmiYaJZ9qVpJo

[@Rays_Bad_Decisions]

@@FeeltheBoot they use performance and growth quotas it's a common tactic. They put in insane best case scenario numbers based off overvaluation and growth of numbers like 50x. After a couple years you've built the company don't make the numbers, they absorb the company. Some financers work together like this to consolidate whole industries and markets. You see it in everything from tech to finance to cannabis

[@FeeltheBoot]

@@Rays_Bad_Decisions I don't see those kinds of terms in any deals I or people I know have been involved with. If someone asks for that, run away. I have taken investments in my startup and made over 30 angel investments. None of those transactions had anything like you described. Those are incredibly predatory terms, and investors like that need to be called out in public. What you describe sounds more like certain kinds of private equity transactions, which usually involve acquiring a majority stake in an operating business. That is a completely different kind of thing and outside the realm of topics I cover on my channel.

[@БиллиБонс-ж1й]

50 x in 5 years good goal 😁

[@FeeltheBoot]

Indeed!

[@БиллиБонс-ж1й]

@@FeeltheBoot hope you were lucky to get a company for 50x last 5 years. Ive been owner of saas IT company for the last 15 years and we know salaries of IT specialists. Anyway, thank you for information you give.

[@christianburke418]

I invented an energy machine, that when combined with a Power Station can supply off grid electricity. I have not finished setting up the manufacturing system, but in the future an Angel Investor might be a perfect fit. Many have offered to lend me money, but I would prefer an investor who wants to be more involved and has the intuition to understand the potential of the SphereMotor. This video gave me a lot of good information. SphereMotor, the future of electricity

[@jonjeskie5234]

Sounds interesting. You're at prototype stage or already started selling?

[@christianburke418]

@@jonjeskie5234 No I have not started to sell anything yet. I made a working prototype, studied patent law and wrote an A+ patent and then I applied for a patent. Patent was granted quickly, without a single office action. Next, I figured out how to manufacture out of my 3-car garage. I still have a few things left to do. I did all this for around 10K. I laugh at the people on the show Shark Tank who have spent millions and have not made a profit. When I watch Shark Tank, I am always looking for someone like myself. I do not like gamblers. You on the other hand may route for people like yourself. Once I progress farther, I probably should look into bringing on a partner. The problem is that I'm not sure of how a partner can help me at this time. I always look forward to what you have to say. Sincerely, Christian B

[@JustMe99999]

@@jonjeskie5234 He claims to have a machine that outputs more power than what gets put into it. That's impossible. Scam.

[@christianburke418]

@@jonjeskie5234 The machine is patented, and the manufacturing set up is almost complete. In the coming months, I hope to make a lot of videos.

[@christianburke418]

@@JustMe99999 I've heard this kind of talk many times before. Maybe that's why I seem to be the first one to do it. Magnetic forces cannot be blocked, but they can be absorbed and deflected. Imagine a super magnet sphere with 600 lbs of pull strength. Now you have a bowl-shaped electro-magnet that conforms closely around the sphere. When a small amount of current feeds into the electro-magnet, the super-magnet sphere is repelled with a surprising amount of force. Around 40lbs. Also the sphere spins at around 3000 rpms. That's equal to ten guys cycling at once to generate electricity. But the machine does not get tired. The fuel is the super magnet. I just figured out the best way to use that fuel. I hope this helps. SphereMotor, the future of electricity.

[@talentsherpa]

Thank you

[@FeeltheBoot]

My pleasure. Did any of these resonate particularly strongly for you?

[@talentsherpa]

@@FeeltheBoot Yes. Absolutely. I am a Saas founder, creating an ai powered marvel which I want to put in the hands of my fellow recruiters as soon as possible. So, I was wondering about whether or not to go the ‘angel’ road to ask for funding. Because you were so informative, I have more questions!

[@FeeltheBoot]

Grab some time on my calendar and we can talk! ftb.bz/Advising