Try East Coast (US) VC's and angels. "Risk averse" doesn't even start to describe some of these folks. We have angel investors who want you to have paying customers and then still want to do 6 months of "due diligence" before making a seed investment.
Had this happen to us in Texas. We had paying customers, and customers who wanted to pay that couldn't afford us (needed to nail down pricing), but we weren't profitable quite yet. Angels wanted nothing to do with us until we were profitable, so that sucked.
It seems like the terminology has shifted a bit or something.
Exactly. There basically isn't anybody doing seed stage investment out here (where "here" is North Carolina for me)... the angels are basically doing what used to be an "A round" and the "early stage" VC's are either "A" round or later.
Now I understand the desire to minimize risk... we'd all like to minimize risk, surely? But for angel investors and venture capitalists to be this risk averse just seems counter-intuitive. Seed stage investing and venture investing are inherently risky, hence the term "high risk, high reward". But these folks seem to want all the reward and none of the risk.
About the best shot you have here at early funding out here is "friends, fools and family", or hope you get lucky and get into Triangle Startup Factory or get an NC IDEA grant. Otherwise, you just have to self-fund everything, or pursue some sort of "alternative" strategy (customer funding, crowd-funding, or whatever you can think of).
Of course, the flip side is that if you do self-fund and you can get some serious traction going, then you have much more leverage with investors at that stage. When you can honestly say "Hey, we don't really even need your money" then you don't have to accept absurdly unbalanced terms from would-be investors. shrug
Angel investing means that they buy equity but don't have input on decision-making. VCs buy equity but do have input on decision-making (usually sitting on the board). I meant it in that context. If that terminology is different between Texas and the Valley, then I'm not aware of it.
Perhaps you should lay out the obvious analysis : Once you're profitable you won't be in a position of needing their cash. Which means that they'll have to make themselves attractive to you, rather than the other way around - they'll understand quickly that much of their negotiating leverage will soon evaporate (assuming you can confidently predict when you'll get to profitability).
