đ Should You Raise from Angels or VCs?
A founderâs guide to navigating the first critical step of startup capital.
đ Hey, Chris here! Welcome to BrainDumpsâa weekly series from The Founders Corner. If youâve been reading along, you know this series is a preview of a bigger project. Well, itâs finally here: The Big Book of BrainDumps is out now!
It isnât a theory bookâitâs the founderâs field manual. Inside, youâll find 70 powerful frameworks distilled from 30+ years scaling software companies to hundreds of millions in ARR, 20+ years investing in 500+ B2B tech startups, and over $1B of shareholder value created. From raising capital to hiring your first VP of Sales, this book turns scars and successes into practical playbooks youâll return to again and again. I expect most copies will become well-worn, scribbled on, and dog-earedâbecause it works.
Table of Contents
Angels vs VCs: Whatâs the Real Difference?
When Should You Approach Angels Instead of VCs?
How Most Startups Actually Do It: Angels First, VC Later
How to Find Angel Investors (Even if You Know No One)
8 Ways to Win with Angels (Even If Youâre Early)
The X-Factor: Angel Relationships Are Personal
Final Words: Angels Are Your First BelieversâTreat Them Like Partners
If youâre an early-stage founder with a killer idea and no cash in the bank, chances are youâve asked yourself:
âShould I raise from Angels first, or go straight to VCs?â
Itâs a fair question.
And like most things in startup life, the answer is nuancedâbut not complicated, once you understand the mindset of both sides.
This BrainDump cuts through the fluff. So letâs walk through it, founder-style, and get real about what makes Angel funding work, when itâs better than VC, and how to actually land that first cheque.
Angels vs VCs: Whatâs the Real Difference?
Itâs not just about cheque size. Itâs about mindset, risk tolerance, and relationship style.
đ Angel Investors
Invest their own money
Back people, not just traction
Often ex-founders or operators
Motivated by returns and the journey
Happy to take early bets on unproven ideas
đ Venture Capitalists
Invest other peopleâs money
Manage funds, answer to LPs
Want strong traction, metrics, and market signals
Typically come in after some validation: MRR, users, PMF
đ Bottom Line
Angels invest in the story. VCs invest in the spreadsheet.
At pre-seed or seed, if youâve got more vision than metrics, start with Angels.
When Should You Approach Angels Instead of VCs?
This BrainDump lays out the key factors beautifullyâhereâs how to interpret them in practice.
đ Traction
VCs want proof. Angels want promise.
If youâve:
Just launched an MVP
Got 10 beta users
Maybe a small pilotâŚ
...youâre not VC-ready. But thatâs exactly where Angels come in.
đ° Funding Requirement
Need < $1M? Thatâs Angel territory.
Most VCs donât look at rounds under $1â2M unless they have a dedicated pre-seed fund. Angels are happy to fund $25Kâ500K to help you build and prove.
đ Geography
VCs stick close to home (70% of deals within 150 miles of HQ). Angels are everywhere.
Some of the best early cheques Iâve seen have come from retired founders living nowhere near a startup hubâbut excited to back the next big thing.
How Most Startups Actually Do It: Angels First, VC Later
If you think of startup fundraising as a relay race, Angels run leg one.
They help you:
Build the prototype
Validate with early customers
Show signs of PMF
Hire the first team
Set early metrics in motion
Thenâand only thenâyou run the second leg and pass the baton to VCs.
VCs want acceleration. Angels help you get on the track.
How to Find Angel Investors (Even if You Know No One)
This is where many founders stall.
Youâve got a great idea, a scrappy product, and momentumâbut no clue where the money is.
There are two types of Angels:
đ Public Angels
On LinkedIn, AngelList, syndicates, pitch events
Accessible, but inundated
Great if youâre persistent, polished, and clear
đ Private Angels
Quietly wealthy founders, exited operators
Donât list their investment activity
Reachable only through warm intros and network effects
đ§ Top Tip
Use public Angels to build credibility and visibility. Then ask them to refer you to private Angels. Itâs the warm intro flywheel that unlocks 90% of early cheques.
8 Ways to Win with Angels (Even If Youâre Early)
Hereâs where this visual guide really shinesâeight practical founder moves that boost your odds immediately:
1. đ¨ Highlight the Problem
Donât lead with your solution. Lead with a problem so painful, your audience feels it in their gut.
2. đĄ Explain Your Idea Clearly
If your pitch takes more than 30 seconds to explain, itâs not ready. Clarity builds confidence.
3. đ Know Your Metrics (Even Scrappy Ones)
Even if you donât have revenue, show activation rate, retention, waitlist sizeâsomething that suggests momentum.
4. đ Pick a Lead Investor
Landing one credible Angel de-risks the round. Others follow fast once the first cheque is in.
5. đ Do the Diligence Work Early
Have your data room ready: cap table, roadmap, financial model (even if simple), legal docs. It screams âIâm ready.â
6. đ Show Youâre All In
If youâre paying yourself a fat salary from day one, it raises red flags. Founders should eat last (at least early on).
7. 𤡠Be Honest About Risks
Smart Angels respect realism. If churnâs high or the market is early, say soâthen show how youâre tackling it.
8. đľ Share Your Exit Strategy
No one invests without a return plan. Whether itâs IPO, acquisition, or strategic consolidation, know your likely endgame.
The X-Factor: Angel Relationships Are Personal
Hereâs what most decks donât teach you:
Angels back people. Not just ideas. Not just TAM. But you.
They want to know:
Do you have grit?
Do you learn fast?
Are you coachable but decisive?
Will you go the distance?
Youâre not just selling your startup. Youâre selling yourself as a founder worth believing in.
đ My Story
One of the best founders I backed early on had no traction. But he had insane curiosity, clarity of thought, and relentless follow-up. Three years later, he raised a $12M Series A. Same product. Bigger proof. Same founder. But everyone now saw what we saw at day zero.
Final Words: Angels Are Your First BelieversâTreat Them Like Partners
Donât treat Angels as stopgaps.
Treat them as the early partners who gave you runway when no one else would. The ones who bet on you, not just your pitch deck.
And remember: youâre not just raising capital. Youâre raising confidence.
The best Angels want to back founders who know where theyâre goingâeven if the map isnât fully drawn yet.
Be clear. Be coachable. Be compelling.
And most of allâbe ready.
âChris Tottman