How to Find Angel Investors: A Guide for Entrepreneurs

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:

What is an Angel Investor?

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.

Learn More: What's the Most Common Source of Funding for Entrepreneurs?

Understand What Angel Investors Are Looking For

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.

Network, Network, Network

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.

Explore Angel Groups

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

Join Angel Investment Platforms

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.

Craft a Winning 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:

• Problem-Solution: Explain why your company matters by making it clear what the problem is, and how you solve it.
• Timing: Try to make it clear that now is the time for your company. This is a chance to build excitement - and FOMO.
• Team: Explain who is on your team and why you’re the people to build this particular rocketship.
• Opportunity: Explain your product or offering (at a high level) and the market opportunity.
• Launch Strategy: Quickly address your go-to-market strategy and why it’s a fit.
• Growth: Paint a picture of what the future could look like.

Consider Crowdfunding

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

What about Artists, Creators, and Athletes?

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.

What to Look for in an Angel

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:

• Alignment with Business Goals: Look for an investor who understands and shares your vision. A misalignment in objectives can create complications down the line.
• Industry Expertise: An investor who has a background or deep understanding of your industry can provide invaluable insights and advice that go beyond mere financial support.
• Track Record: Examine the investor’s past investments. A solid track record in supporting successful startups is often a good indicator of a savvy investor.
• Availability: An ideal angel investor should be available to meet with you regularly. They should be interested in how the business is progressing and offer guidance as needed.
• Network and Connections: One of the most valuable assets an angel investor can bring to your startup is a strong network. Access to the right people can accelerate business growth exponentially.
• Willingness to Mentor: While not a strict necessity, an angel investor willing to act as a mentor can offer a wealth of business acumen and experience that can be incredibly beneficial for a new entrepreneur.

Making the First Move: Cold Emails and Social Media Outreach

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.

Cold Emails

1. Research: Before hitting the send button, take the time to research the angel investor. Know their investment history, industries of interest, and any common connections you may have.
2. Personalize: Always personalize your emails. Generic messages rarely get the attention they seek. Referencing a recent investment or a mutual connection can make your email stand out. Or, you can mention why you think they’re a perfect match for this opportunity.
3. Get to the Point: Angel investors are busy people. Make your pitch concise yet engaging. Start with the problem, then quickly explain how you intend to solve it. Try to quickly articulate your unique positioning and defensibility — all in a few sentences.
4. Clarify Your Ask: Investors know you’re asking for capital. That said, the first meeting is a chance to learn from them and get their take on what you’re building. Make it clear that you’d like 20 minutes to hear their thoughts. 
5. Attach Your Pitch Deck: It’s typical to attach your pitch deck and/or website. This makes it easier for angels to learn more on their own time, without forcing a sales-y call.
6. Follow-Up: If you haven’t received a reply within a week, it’s generally acceptable to send a polite follow-up email. Prioritize follow-ups with people who actually engaged with your email or deck. Persistence can often pay off, but know when to move on if you're not getting a response.

Social Media

• LinkedIn: This is perhaps the most professional platform to approach potential angel investors. Like cold emails, personalization is key. Tailor your message to each individual, and make it clear why you're reaching out.
• Twitter: While less formal, Twitter can also be a good platform to make an initial contact. You can start by following the investor, retweeting or liking some of their posts, and then sending a direct message. Keep it casual yet professional.

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.

Ace The First Meeting

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:

• Be on time. There’s simply no excuse for showing up late to an investor call. And if you need to cancel, do it in advance - not 5 minutes before.
• Be confident. You’re in the meeting for a reason. Show up with confidence, energy, and a smile. 
• Ask for opinions. Angels are knowledgeable, experienced, and insightful. Your conversation is as much a learning opportunity as a sales opportunity. Plus, there’s an element of truth to the adage, “Ask advice, get money. Ask for money, get advice.”
• Say “thank you.” It’s so simple, but expressing gratitude is always a good idea.

Keeping Tabs on Your Angel Outreach

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:

Use a CRM System

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.

Create a Spreadsheet

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.

Set Reminders

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.

Keep Notes on Interactions

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.

Update Regularly

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.

Due Diligence and Legalities

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.

Closing the Deal

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.

Finding the right angel investor can be a game-changer.

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.