Fans of Asian startups probably already know about Angel’s Gate, since it’s a reality show for startups that’s backed by some of Asia’s biggest venture funds. Today, the latest episode of the show was broadcast. It featured travel discovery service Flocations — you may remember these guys from their pitch at Startup Asia Singapore — and we sat down with Tudor Coman, one of the founders, to learn more about the show, his experience, and why the Flocations team chose not to accept a funding offer at the end of the show.
First off, can you give us some background…
Several months ago we applied to be on the televised investment program called Angel’s Gate, Episode 6. Very similar to UK’s Shark Tank and Canada’s Dragon’s Den, however, Angel’s Gate concentrates more on Angel investing in the technology sector, something very suited for our budding travel discovery startup. After several try-outs, filming our pitch, meeting with organizers, and several rehearsals, our show was finally aired as Episode 6 on March 12th at 8pm on Chanel News Asia. You should be able to see the show on Youtube within a few days after airing and we will be sure to tweet about it @flocations and also on our facebook and blog.
Tell us about the setup of the show
First, you have to go through the initial “elevator pitch” trial which is quite literally pitching your product within an elevator on a 30 second ride (we rode from the first floor to the 32nd floor, apparently this elevator did about 1 floor/second). During your 30 seconds, you have to convince the Angel that is riding with you to invite you onto the next phase of the program which is the Angel’s Gate. I think I rehearsed that pitch close to 100 times all while recording it on video. After the pitch, you come onto the the main show, where 4 Angels are waiting for you, all lounged in their white suits and plush chairs, while we were pinned down to one area of the floor to talk about our business in 15 minutes. Florian, my cofounder, didn’t speak much because any technical questions were fleeting so I’m quite sure he will look quite funny standing silently on television.
What was it like being on Angel’s Gate?
It was a great experience. I highly recommend any startup to apply to Angel’s Gate if you are within Southeast Asia. It’s great for publicity and you also get to meet other entrepreneurs on the show. Also it doesn’t hurt to practice pitching to as many and as wide a variety of people as possible. I think Angel’s Gate served as sort of a “pitching hurdle” since every pitch afterwards has been quite easy for us. If you have an idea, product, or are looking for extra funding, you should definitely apply!
So it has been helpful, then?
The program has been helpful. Even though we didn’t accept the offer, the publicity has been great — especially for a travel startup. It’s such a competitive market for travel and any publicity we can get, we cherish and appreciate. I would also recommend this for any technical entrepreneurs that need to get their message out. We are quickly realizing that regardless of how great a product you have (ours still needs some work to get there), the final game will be about marketing. The more press, marketing momentum, and mindshare you have, the better.
So what happened with the funding offer on the show?
The pitch took about 5 minutes between Florian (my co-founder) and I. Afterwards, there was another 5 minutes of questions and then the Angels had to decide. To tell you the truth, we went in there for the sake of publicity; fund raising would have been an added bonus. The mental model we entered with was your standard fund-raising process: get the angels to buy in first, then negotatiate valuation. That’s how regular fund raising works! Turns out we didn’t anticipate the TV show factor…
Well, the Angels gave us their offer. However, the valuation was half of what we were seeking, so right away our minds were leaning on the negative, but we were willing to work with them as their mentorship would have been valuable. Even before we tried to rebut the offer, the Angel said “you have 15 seconds to decide, go!”. 15 seconds!? To make a decision this big!? I think we wasted 5 seconds trying to compute the situation. Coming out of our stupor, Florian and I looked at each other, and lowered our voices to something incomprehensible (we hope). For the next 10 seconds, in whispered tones, facial expressions and blinks we agreed on a more favorable offer. Unfortunately it didn’t appeal to the Angels. So, with tin-can in hand, we walked off into the sunset.
This is where we didn’t anticipate the TV factor. After all, television is for entertainment so a few twists and hooks makes good television. But when we’re talking about hundreds of thousands of dollars in funding, at least give people a few minutes to count it on their fingers as sometimes it’s not a clear-cut decision. In addition, angel investing is about a lot of trust, something that is built upon over time and can lead to seed funding – giving someone a 15 second ultimatum immediately creates distrust and an unstable foundation.
Do you think you made the right choice?
In hindsight, it would have been nice to have the capital, but we definitely don’t regret it. We are in an incubator now, JFDI, which is part of the Global Accelerator Network. It’s Day 42 out of a 100 day program and we already have a stronger product and great mentors who are guiding us through development. On day 100, we will be pitching to investors from around the world. In fact, I would love to extend an invite to the angels from Angel’s Gate so they can then perhaps give us the right valuation!