What do F1 Racing and Fundraising have in common? In both, the outside world sees a solo hero tackling an extremely difficult contest.
Lewis Hamilton, driver for the Mercedes car, comes back from 10th to win the São Paulo GP in stunning fashion. Emily Rasmussen, CEO of Grapevine, navigates a daunting fundraise disrupted by holiday breaks and investor indecisiveness to close an awesome pre-seed round.
The other common thread in both sports is that success is dependent on a team in the background- despite it seeming like an individual effort. The Mercedes engineering team and pit crew do so much to put Lewis Hamilton in a position to make magic happen in a race.
In startup fundraising, having a team that wants to help push you over the finish line makes a massive difference. This team is separate from your co-founders and the employees actually building your company. It's the people who are helping make intros, backchannel, send positive notes/references, and build the momentum that closes fundraises.
It’s possible to build this team organically and slowly over time. That's what I did before I launched my last fundraise in 2017. My "team" was built over 10 years in tech and investing. I worked alongside amazing individuals who would go on to build huge companies and I helped people when I could without asking for anything in return. So when it was my turn to fundraise, I had a team that was excited to make connections for me and speak positively about me.
My leisurely approach over a decade worked for me, but most founders don't have that luxury. The question is how do you assemble a team to support you if your deadline to start fundraising is 10 weeks and not 10 years?
This is where the idea of the Angel Army strategy comes into play.
The Angel Army strategy is usually employed before raising your first round of funding (pre-seed), but I'm seeing it executed now in preparation for later rounds like Seed, A, and beyond. The idea is to allocate a tranche of capital whose purpose is not primarily for operations. The goal of that bit of capital is to get the most helpful, influential people that you can to join your team. No better way to get someone on board than to give them financial incentive to help.
For the Angel Army strategy, you would rather get an up-and-coming product manager at Coinbase on your cap table for $1k than you would a dentist for $100k. The added Credibility and Network you derive from your Angel Army is more valuable than the dollars they actually contribute.
So how do you go about building an Angel Army? Thing about it as a slightly condensed version of a full fundraise with a few tweaks to consider. Here are some to consider:
a. You don’t need the money (max round size),
b. You only want really committed people (minimum check size),
c. We want more amazing people not more money (max check size), and
d. There’s a shit ton of demand and we’re serious about getting back to work (time deadline).
Every one of those rules can and should be broken if pushed. People love when you bend rules for them and as mentioned before, investments outside of those parameters (like the $1k check from a well-connected operator) can be even more valuable.
Recruiting an Angel Army with super connectors and domain experts gives you value far beyond the invested capital that can be an absolute fundraising gamechanger. Call this the “Halo Effect” of an Angel 😇 Army (couldn’t help myself 😜). You enhance your network and credibility while multiplying your ability to secure warm introductions, in turn building undeniable momentum on your way to closing an institutional fundraise.