If you are an early stage startup who has decided that raising capital from angel investors is a path to pursue, this post is for you.
For this Valentine’s Day post, we gathered top tips for finding angel investors and spiced it up with a cupid twist.
Raising an angel round of funding is like finding the ONE
First, recognize that investors aren’t just a source of capital, they are your partners for five to seven years or until they “cash out.” Many consider themselves “value-added” investors in that they may be subject matter experts, or have industry knowledge in the problem that your startup seeks to solve or can connect you to those whose connections may accelerate your startup’s growth trajectory.
Many are former entrepreneurs themselves and while they are looking for a return on their investment, they do derive a certain amount of satisfaction from supporting members of the startup community i.e. you. But accepting angel capital is not a transaction, it is the start of a long term relationship. So identifying the right angels to approach is key to a successful relationship and collaboration.
Identifying your ideal angel investor
In dating, you have to know what you want in a partner before you can find him/her. In raising angel capital, matching up your startup to an investor’s industry-specific interests (based on previous or current portfolio companies) and her/his domain expertise will help you find angels who have a higher probability of being receptive to your pitch. Developing a target list with whom you want to develop relationships with i.e. “court” is the first step to identifying the ideal angel(s).
Easy Sleuthing Tactics
- Use social media. There are a number of specialty tools that help keep track and gather intelligence about angels. But following their updates on Linkedin, Twitter and if they have personal blogs, following them there and leaving comments across all three channels, will help you get to know your subjects better and how to get their attention.
- Meetups/Mixers. If you are already conducting #1, you will most likely know which events they are attending. You will also not have too much trouble striking up a conversation at these events since you know what’s on their mind based on their social sharing.
Asking for a meeting(date)
If you’re single, asking someone out on a date can be nerve-wrecking. The same is true asking your ideal angel for a meeting to discuss your startup. But before you can ask them for a meeting, you must first meet them where they are.
Meeting Your Ideal Angel
- Get in Traffic. Just as you had to “Get out of the Building” while conducting customer discovery for your startup, you have to do the same to meet angels or those who can make introductions to angels. Singles have bars, laundromats and grocery stores, startups have meetups, pitch competitions and hackathons. Use social channels to discover where your angel(s) will be and meet them there. When you are at the event, see #2.
- KISS. Keep it Short and Simple. If you are meeting him/her at an event in which they’ve just given a presentation, there is probably a whole line of people waiting to talk to him/her. So be sure you have your one-sentence pitch down TAILORED to his/her interests which you know all about because you’ve been
stalkingfollowing him/her in social channels. Customizing your pitch will help him/her remember you and being considerate about your fellow attendees’ time will predispose him/her to taking your call.
- Matchmakers. Some of the best romantic matches are made through personal introductions. Your professional service provider be it legal counsel or accountant can be some of the most valuable sources of introductions to potential angel investors. In that same vein, don’t discount your advisory board members. Some might be potential investors themselves. While others may be able to provide a warm introduction to the right angels.
Finally, AngelList and Gust.com are to startups what match.com and eharmony.com are to singles. We will delve into ways to maximize the value of these platforms in a future post.
But for now, what else should startups do to identify the right angels and get that first meeting?