I took a meeting this morning with a first time founder who meekly asked if I could explain the seed stage funding landscape - who exactly are these angels and their groups, how does a fund operate, where exactly does one meet investors? He'd heard the jargon but didn't quite understand it, and figured when he was ready to do more than work from home, it was time to go find other people's money.
Fundraising is a drag - time consuming, confusing and endless. There's no roadmap. The process is frustratingly opaque, even, frankly, to those of us on the other side of the conversation.
The least painful rounds I've been involved with were coordinated by entrepreneurs who'd not only built the requisite stellar product and team, but cultivated a wide network of relationships extending well beyond the names and places everyone already knows.
I'd never heard of a single or multi-family office before either, so you're far from alone. Many ultra-high net worth individuals or families operate their own independent firms for their personal financial and investment management.
Many invest not only in funds and private equity but directly in companies. Though not always easy to identify - they aren't usually titled "Jones Family Office" and don't publicize their activities - they control an astounding amount of money and are spread out all over the country and world.
When you graduate from school, you're immediately inducted into a network of people who, by simply virtue of having a degree from the same institution, are more likely to be helpful to you.
Entrepreneur or not, few alums leverage one another as much as they could; a cold meeting request from a fellow Bearcat or Eagle is the kind I'll always accept. Several colleges and universities have established their own angel groups that are comprised of graduates, and some even focus on companies founded by fellow alumni.
Grants, Contests and Loans
You don't actually have to give up equity to fund a business - shocking! I was really impressed by two co-founders from St. Louis the other day who said they funded their early development with $300,000 by, "applying for every grant and contest we could possibly find that we qualified for, or even just mostly qualified for."
Just like taking the time to uncover every tiny college scholarship you can get, there's literally a wealth of (obscure) grant funding and contest prizes out there, from corporations, foundations and government.
You can also go the traditional route, and take out a loan - I know several startups in New York that have successfully leveraged them to avoid equity fundraising altogether.
Platforms like Bond Street and bigger institutions like Silicon Valley Bank specifically focus on small businesses and early stage companies.
You've probably heard of Google Ventures and Intel Capital, but did you know General Mills and 7-Eleven make venture investments? So do William Morris Endeavor, Mayo Clinic and Best Buy. Even Sesame Street is on the action.
Unlike purely return driven traditional funds, corporates often look for strategic alignment when making investments, allowing them some degree of flexibility if an opportunity aligns with their innovation needs.
They may invest opportunistically from their balance sheet, so look not only for people with investor titles but those in corporate and business development.
Make a list of companies to whom your product could be most valuable and I bet you'll find more mutual connections there than with elusive Sand Hill Road names.