Thank you to Fred Wilson who posted an insightful blog on the definition of a “lead investor”. If you are looking for capital, this is a must read.
Working with the startup world, I can tell you that 90% of angel investors are bandwagon junkies. Most of them will only invest when someone else already has. So if you’re looking for capital, focus all of your efforts on a champion. Someone that will sing your song as loud as you. Once that champion investor is found, you will get your capital. But this person is 1 in 10 (or 50 maybe, or even more).
This isn’t a bad thing by the way. Most investors have an area of expertise. If they only invested in their area of expertise, think how limited they would be in where they could invest. Good investors will be leads in areas they know, love, and understand, and can be a great resource for other investors with little to no knowledge of the area.
So, if you’re looking for capital, find investors with a deep knowledge of your area, and you’re most of the way to finding your champion/lead investor, and the capital you need for your company.
And, as always, if you’re looking for capital, ask for advice. If you’re looking for advice, ask for money.