Launching your business? Chances are, you'll need capital. That's where angel investors come in. In this blog post, we'll break down how to find angel investors who are not just willing to invest but are also the right fit for your business. You’ll also explore angel investor platforms and where to find them, and even offer insights for artists and creators who need support.
Let's dive in:
Angels invest their own money into businesses, often startups, in exchange for equity. They typically invest anywhere from $10,000 to $100,000, usually in early stage companies.
Angel investors are high-net-worth individuals who provide startups with capital in exchange for ownership equity or convertible debt. These investors typically look for startups with high growth potential, a strong team, and a clear market opportunity. But every investor is different, and understanding what they look for can help you pitch your business more effectively.
The adage "It's not what you know, but who you know" holds weight in the startup investment community. Leveraging your existing network can open doors to potential angel investors. When it comes to connecting, you have options; everything from digital channels like social media to physical experiences like industry conferences can provide meaningful opportunities to create connections.
Networking-focused events are also a great place to make contacts with investors and build relationships. Start by looking for relevant events in your area. You can find such events on platforms like Meetup, Eventbrite, and LinkedIn or by checking with local startup incubators and accelerator programs. When you attend these events, make sure to have your elevator pitch ready, so you can introduce your startup and what you’re looking for.
Angel groups are networks of investors who pool their resources to invest in startups. These groups can help you connect with potential investors that have similar interests and investment goals. They can also help you with mentorship and advice. Start by researching local angel groups in your area. Some popular angel groups include Angels + Entrepreneurs, Tech Coast Angels, Golden Seeds, and Band of Angels.
Learn More: How to Find Investors in 7 Simple Steps
It's easier than ever to find and connect with angel investors online. Platforms like AngelList, Gust, SeedInvest, and Crowdcube offer a space where you can present your startup to a wide audience of angel investors. The key is to make your business stand out with a compelling profile and pitch.
A good pitch doesn't just focus on the financials; it tells a story. Angel investors invest in people, not just businesses. Aim for a strong 90-second pitch, as well as a longer 3-5 minute version. These are the points you need to hit:
Crowdfunding is another way to get funding for your startup. This approach involves raising funding from a large number of people, typically through social media and other online channels. There are several popular crowdfunding platforms, including Kickstarter, Indiegogo, and GoFundMe. Crowdfunding can be a great way to build traction for your startup and raise capital at the same time.
Learn More: A Guide to Pre-Seed Funding for Startups
Non-startup entrepreneurs like artists, creators, and athletes need support, too. There are specific angel investor platforms like Patreon, Kickstart Art, and ArtStart that are tailored towards these groups of people. These platforms allow you to connect with potential investors who are interested in supporting your creative vision.
In addition, investors like Chisos Capital invest directly into individuals with big ideas - not just startups. If you’re building your personal brand, investing in upleveling, or training for the next level, we can help you fund that growth.
When searching for an angel investor, it's not just about the money; you're essentially inviting someone into your business family. In fact, SVB found that “[seed stage] companies can do best when they choose initial investors for their guidance, not necessarily the size of their check.”
Here are a few key attributes to look for:
Even in the digital age, making that first connection can be intimidating. However, a well-crafted cold email or a thoughtful message on social media can make a strong impression.
Remember, the goal of the initial contact is not to secure investment immediately but rather to pique interest and secure a meeting or a phone call where you can present your startup more comprehensively.
You only get one chance to make a good first impression. It’s important to ace that first meeting with an angel. Here’s how:
Fundraising is often a long and intricate process that involves multiple interactions with various potential investors. Effectively tracking these interactions can help you stay organized, improve follow-ups, and ultimately increase your chances of securing the right investor. Here’s how:
Customer Relationship Management (CRM) systems aren't just for managing customers; they can be extremely useful for investor relations as well. Use a CRM to log interactions, meetings, and follow-ups with each investor prospect.
If you're not using a CRM, a simple spreadsheet can also serve the purpose. Include columns for the investor’s name, contact details, the stage of interaction (initial contact, follow-up, meeting scheduled, etc.), and any notes from previous conversations.
Whether you're using a CRM or a calendar app, set reminders for follow-ups or upcoming meetings. Consistent and timely communication can leave a positive impression on potential investors.
After each meeting or interaction, jot down some notes about what was discussed, what the investor’s concerns or questions were, and what the next steps are. This will make future interactions more effective and tailored.
As you make progress with each investor—whether that's moving closer to a deal or realizing they're not the right fit—make sure to update your tracking system. This ensures that you're focusing your efforts on the most promising leads.
By carefully tracking each interaction with potential angel investors, you can streamline the fundraising process, making it more efficient and effective. This organization can help you present yourself as a thorough and diligent entrepreneur, increasing your appeal to prospective investors.
Once you find a potential angel investor, you'll need to go through the due diligence process, which involves a thorough investigation of the business by the investor. Prepare all necessary documents, including business plans, financial statements, and legal agreements. Being transparent and prepared can go a long way in securing that crucial investment.
After due diligence, the final step is closing the deal, which involves signing legal documents and exchanging funds. This is a critical stage and you should involve legal experts to ensure that the terms are favorable for both parties.
The process is time-consuming and often challenging, but with the right approach and resources, your dream of growing your startup can become a reality. So, are you ready to find the angel investor who will propel your business to new heights?
Don’t forget, Chisos invests up to $100,000 in people with big ideas, and the ability to achieve them. Our online application process is easy. Take the first step toward making your dream a reality today.