Angel investors are interested in helping small startups by injecting capital in exchange for convertible debt or owner equity. I have invested in a number of companies after meeting the founders at events. How to get funding for your startup is a problem which confounds lots of founders but with the right business and some simples steps is achievable.
However, meeting and pitching your idea to angel investors is seldom straightforward, so I’ve put together a guide to help you find angel investors and prepare a killer presentation.
Types of angel investors.
Angel investors can be individuals or groups formed through investors pools and crowdfunding. Because they invest their own funds, factors such as confidence, trustworthiness, and delivery play a much more significant role when compared to dealing with venture capitalists.
Meeting angel investors.
Industry focused events are a great way to meet angel investors. You can now employ technology to help you find angel investors for your startup. From websites to conventions, angel investors are more available than ever before.
Related: Why Angels Are Moving Online
Angel investors like to remain anonymous for the most part. However, since the emergence of technology as we know it, you can now find online, directory-style websites that help you connect globally with angel investors via the internet. You can then set up meetings where you can pitch your idea to potential investors in your area. Some examples of these websites include:
Unlike venture capitalist events, which are often held in or around big cities, angel investor events are held across the whole country. With a little bit of planning, you will have the opportunity to pitch your ideas not to one, but to hundreds of angel investors looking for promising startups and entrepreneurs. Some of the most popular angel investor events this year include:
Angel investment networks and groups.
You may also contact an angel investor, investment network, or angel investor group directly to pitch them your idea. This may seem like the simplest way to meet an angel investor, but it’s also the least effective. Angel investors usually screen ideas before even looking at them, and unless you have a connection or advocate with an individual or in a network, your contact request will probably be lost in the thousands received each day.
If you are not confident in your fundraising skills, you can always employ fundraising advisers to help you get your startup rolling. Similarly to the investors themselves, fundraising advisers will only take on clients with potential to sell to investors, so make sure you prepare a great presentation for them, too.
How to pitch angel investors.
Once you have scored your first meeting with an angel investor, you will have to prepare a presentation to pitch your idea. There are key aspects of your pitch that angel investors notice, so make sure you lay the groundwork for an excellent delivery.
Investors will want to contact you and ask questions even before your meeting if they really like your startup idea. Giving them open communication channels can cultivate your relationship, which can be a huge deciding factor.
Find a vocal champion.
Before you get a meeting, you should obtain an investor or investor group. You should try to recruit a vocal champion inside of the group or close to the individual. Establishing a vocal champion will help you draw in members of a group into the discussion or engage individual investors, pushing them to consider the pros and cons of your startup.
Research their process.
Each individual or group of angel investors follows a unique process to choosing a startup. Familiarize yourself with this process as well as you can. Take notes and use the information to deliver key information at critical points in the process.
Deliver a memorable presentation.
The biggest, most prominent element of your pitch, is delivering a strong presentation. There are many components to a great presentation, but knowledgeability and confidence are at the top of the list. In addition, you must always remember to:
Tell a compelling story –Remember, your potential investors are not customers, so tailor your presentation to achieve maximum engagement.
Get straight to the point – Presentations have designated time slots, usually between 10 and 15 minutes. Stick to your allotted slot to show you respect the angel investor’s time.
Cover the money – Angel investors may be swayed more by emotion, but they are still investors. Don’t be afraid to cover the financial aspects and exit options in case your startup does not generate revenue.
Be prepared to answer questions – At the end of your presentation, they will bombard you with questions, so make sure you are ready to answer anything from finances to operations.
Wear your orator cap – Employ strong public speaking skills to deliver an eloquent presentation. This includes tone of voice, body language, effective visual aids, etc.
Aim to build a relationship, not to close a sale – Don’t treat your meeting as a sales opportunity. View it as a chance to cultivate a good relationship and establish rapport with your potential investors.
Meeting and pitching to potential angel investors can be a very stressful, but by using the tips outlined above, you will be able to elevate your startup to the next level in no time and get the funding you deserve.