Tips for Finding and Pitching to Angel Investors

Need more money for your startup? Depending on your situation, you might want to explore venture capital funding or you might want to seek financing from an angel investor. Angel investors may not have the resources of a venture capital firm since they tend to be high net-worth individuals seeking to invest their own funds, but they are less likely to seek direct involvement with the company and are often willing to invest long-term in products they believe will succeed. Usually, they will seek ownership equity or convertible debt in exchange for their investment. 

Here are a few tips for finding this type of investor:

1. Network and ask your existing contacts. Any business owner – especially when starting out – should network as much as possible. You never know when a particular contact might have information to share about possible funding. 

2. Search for angel investors near you or for national groups. There are numerous angel groups online. You can usually search by industry or region to find those close to you. 

3. Attend events geared toward angel investors. Presenting your company to a significant number of angel investors in one place is a boon to your prospects. Attendees at such events are likely to be motivated investors who are actively seeking a good funding target.

How Do You Pitch to Angel Investors?

The first order of business is to know your audience inside and out. Put yourself in their shoes. If you were an angel investor, what would you want to hear? What would you find persuasive? The answers to those questions might be a matter of personal taste, but there are some rules of thumb when pitching to angel investors:

  • Give enough information and statistics, but do not overwhelm your audience. Any experienced angel investor understands that there might not be a lot of actionable data concerning your company yet, so only present reliable data where applicable and appropriate. Be prepared, however, to discuss your company’s finances in detail.  
  • Speak from the heart. Bring people on board with an exciting and compelling story. Again, it’s nice to have numbers, but you need to make your audience believe in your product and your vision.
  • Highlight your team. Having the right people in place is crucial for the success of your startup. Angel investors want to see that you have chosen an incredible team that is committed to the enterprise. 
  • Tell them how they’re going to get their money back.Provide a  powerful close to your presentation that outlines how your audience will profit from investing in your business. 

Conclusion

If you are preparing to do business with someone who wants to invest in your company, securing your own legal counsel is crucial. Protect your interests now and down the road by calling 925-399-1529 to find how IGC can help.

Written by Integrated General Counsel

Our focus includes handling a variety of corporate matters and also includes litigation in state and federal courts. Our current practice includes providing transactional services and representing a variety of small and medium-sized companies as their outsourced general counsel.