When it comes to funding in San Diego.

We work with a lot of local VC’s and Angels here in SD. It’s important to set the expectations right for the entrepreneur from the get go. So here’s how we feel about the local scene when it comes to funding.

Local angels we have spoken to are funding deals from 10k-50k.

Venture funds are all over the place with their investment strategies right now. Some are toying with the idea at earlier stage deals (approx. 500k-1.5M), others are looking at later stage deals (>1.5)

If you think collecting a bunch of email addresses and shopping your executive summary to random people is an effective fund raising strategy, stop reading here and go get a day job. These guys get a ton of emails, the more words and attachments an email has, the less likely they are to read it.

The best way to get in front of an investor is through a personal connection. Don’t have any? Well it’s time to make some. You can meet a lot of great people at events hosted by these groups.

Don’t be shy to put yourself out there and be prepared to kiss a lot of frogs before you find a prince. Everyone you meet has something valuable for you to leverage, it’s up to you as a founder to discover what it is.

Before you go on the quest for money, can you honestly answer yes to the following questions-

Have you:

• Validated your model? (AKA – got customers, paying ones that aren’t family?)

• Convinced your team and other founders to go all in without pay or restricted pay for at least 6 months?

• Identified smart money to go after?

• Figured out how much you need to make it to year three before you are profitable?

• Done your homework on funding so that you don’t get totally hosed during negotiations if you get that far?

• Avoided the pitfall of building your entire company using contractors and instead of passionate, hell bent on success co-founders?

Ok.. Glad you’re still with us:

Now for the reality of the situation. Finding money right now 2009/2010 is just really damn hard. We’ve seen some of the best entrepreneurs we’ve ever come across run out of runway regardless of how great their offering and team was.

So what’s the solution?

Build small and quick. Don’t spend your time waiting to make everything perfect, it will never be perfect, that’s why you hire sales people down the road. As Kawasaki often says – “ship then test” Bootstrap what you can and if you are truly creating meaning, money may find you first.