How we raised $200,000 from an Angel Investor (after he said NO)

Back in 2015, when I was working on my previous startup (an online marketplace for construction work) I learned 2 important lessons while being in the process of raising capital to grow the startup:

✅ Validation is KEY
✅ Narrow down your target audience

TLDR: https://www.youtube.com/watch?v=26QzGD3OCIw

When we were at around $5,000 MRR and we thought the product was validated, we were looking to raise some capital.

When I met with an angel investor, he actually left within 10 minutes after I told him about our product and the revenue. He said: “I know enough, I’ll be in touch”.

Now, I didn’t know what to think of that. Was this a positive thing?

The next morning, I got an email from him saying that he wanted to invest in us: $15,000. Now, that was a bit of a bummer, but hold on, this was actually my most important lesson!

When we sat down the next week, he made his proposal clear to me: He wanted to invest $15,000 with ZERO interest because he just wanted to see what we can do with such a small amount of money and how we would spend it.

He said: “If you can show me growth, I will put in an extra $200,000 next”.

By spending this small amount of money wisely (by focusing on a really small target audience within our wide scope), we managed to get a really great ROI on his investment.

Because of this validation, we ACTUALLY validated our business model and we got our $200,000 investment from the angel investor and we managed to scale our monthly recurring revenue from around $5,000 to a mind-blowing $50,000!

Full story (with visuals) in this week’s video: https://www.youtube.com/watch?v=26QzGD3OCIw