Dear SaaStr: What Was The Best Advice You Ever Got From an Angel Investor

Dear SaaStr: What Was The Best Advice You Ever Got From an Angel Investor

In the world of start-ups, advice from angel investors can be invaluable. They bring not only capital but also years of experience and a wealth of knowledge that can guide founders through the challenges of building a successful business. One such piece of advice, shared by a founder, has stood the test of time and continues to resonate with entrepreneurs facing tough times.

The story begins during a particularly difficult period for the founder. Their co-founder had left the company, leaving them with only four months of remaining cash and a dwindling customer base. The situation seemed dire, and the founder was struggling to find a way forward. It was during this time that they met with one of their angel investors and mentors.

The investor, sensing the founder's despair, delivered a blunt piece of advice: "Stop feeling sorry for yourself." This was not the kind of advice the founder expected, but it was the wake-up call they needed. The investor knew that self-pity could be a major obstacle to overcoming adversity and moving forward.

The investor then offered a series of actionable steps. First, they urged the founder to step away from the office and focus on expanding their customer base and closing bigger deals. This meant taking proactive steps to grow the business, rather than dwelling on the challenges they faced. The founder, though reluctant, followed this advice and went on to secure partnerships with companies like GE, Dell, and Comcast.

Next, the investor advised the founder to hire better people. The importance of a strong team cannot be overstated, and the founder recognized that bringing in talented individuals could significantly improve their operations. They took this advice to heart and hired a Vice President of Marketing, which proved to be a game-changer for the company.

Finally, the investor emphasized the need to extend the company's runway. This meant finding ways to conserve resources and secure additional funding. The founder responded by cutting their own salary and raising an extra $500,000 at the last round price. This, combined with other cost-saving measures, gave the company an additional year of runway.

Looking back, the founder realizes that the investor's advice was spot-on. Instead of dwelling on their limited resources, they focused on finding ways to grow and improve. The investor's words served as a reminder that even in the face of adversity, there are always opportunities to move forward.

This story underscores the importance of resilience and proactive problem-solving in the world of start-ups. Angel investors like this one offer not just money but also the wisdom and experience that can help founders navigate the ups and downs of the entrepreneurial journey. For those facing similar challenges, the lesson is clear: when times are tough, it's crucial to stay focused on growth and find ways to overcome obstacles, rather than succumbing to self-pity. The path may be difficult, but with determination and the right advice, success is within reach.