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MenuWhat is the best way to reach angel investors for my start-up?
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There are a number of different ways of reaching angel investors.
First, identify the type of angel investor you are looking for.
Then initially look within your own network, share what you are doing and you might be surprised.
Next research where your investors hang out and try and be part of the conversation.
Maybe there are incubators or accelerators that would be suitable and who can support you or facilitate investor introductions, meetings, and pitch events.
Maybe it might make sense to seek a grant or get funding from a partner who would also benefit such as in the education sector?
Another option that takes time is to find and connect to your investor audience through networks such as LinkedIn.
You can then nurture those relationships over time, ask for advice, keep them updated, take conversations offline, and establish trust.
Then probably after 6+ months of nurturing when you do raise funds, you should have earned a warm relationship that will allow you to approach them with regards to potentially funding your business.
Warm intros are definitely the best approach. Once you have your initial investors keep building relationships and they may recommend new investors next time round.
Worth noting with angels there is smart and dumb money and you may find that a coach/mentor from your sector provides more value compared to an angel who may be able to support you but on a more general high level. But as a rule of thumb always ask for support, your investors will usually provide, they are aligned with your potential success.
Good luck!
In most cases, you need to be referred to an angel investor. So, to find angel investors you need to get to know the right person, which means immersing yourself in your local business and social community. Focus on business owners – as these are the people who might be or become angel investors themselves or know an angel investor. While there are some angel investors who invest entirely on their own, many operate as part of an informal network or syndicate where they can pool their resources and share the risks.
You can read more here: https://www.thebalancesmb.com/how-to-find-an-angel-investor-2948107
Besides if you do have any questions give me a call: https://clarity.fm/joy-brotonath
To address your question (how to reach the angel investors), it is advisable to answer the following question:
1. Is angel funding the best fit for your business capital structure? Have you designed your capital structure to meet your current needs and position to maximize your wealth in the future?
2. Is your current business really to look for angel investors? Do you have a list of criteria to achieve and a business sale package to impress the angel investors?
3. Do you conduct an evaluation to check whether you and your team are suitable/ suitable to accept an angel investor and/or new partner?
4. Have you develop some personas of the angel investors so that you know who to look for?
5. Do you have a deal flow strategy to include a) what to sell, b) who to invest, c) how to attract them, d) strategies to cover legal and commercial aspect, e) who to manage the business, f) how to manage investor relation, g) clean up documents & information for due diligence purpose, h) and so on ...
If you have the answers for all the above, you are on the right track - you know how to get your investors easily. If this is not the case, you can contact me and I can customise an advisory package for you based on the answers from the above questions.
Related Questions
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How much dilution should I expect when raising a super angel round for 700k?
Im an investor and advisor. As many people as you ask, you will get different answers. The best and most successful way to raise capital is to start with people you know, aka friends and family. If friends and family are insufficient as they often are, then you need to find angels. If you dont know anyone, network. They arent hard to find. It might be a good idea to find a few prominent local people to serve as advisors and get their help in raising money. The worst part about raising money is that it almost always deflects from running the business. If you want to discuss this further, Im available.AC
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Interested Angel investors want to fund my innovative idea, whats next?
Simple: The right investor is someone who wants to invest on standard terms at a good valuation relative to your current stage. Extra bonus points for someone who has relevant industry connections that could accelerate your business and is willing - at the right time - to make introductions for you. But you should have really quite low expectations of most angel investors. Certainly they should have NO operational control of the business. Although I want to be as helpful as possible to companies I invest in, it's entirely for the entrepreneur to drive me, not the other way around. There are very few exceptions to this rule, for example when angels who actually do have very recent and relevant experience want to back someone who is inexperienced and need oversight in order to feel comfortable investing early. But this is a real rarity. Finally, to answer your question about what entrepreneurs do when they receive funding, they should spend it in the best possible way to accelerate the success of the business. I'd be happy to talk to you in a call to provide more clarity on the matter and also discuss when is the right time to accept investment. If you have people willing to back you, that's great. You want to make sure you have a clear plan and set expectations accordingly.TW
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Looking for guidance for where I can find investors for my app?
As Ken suggested, there is a wide breadth of mobile offerings and although there are some great "mobile only" funds, each investor / fund has their own thesis that makes them interested in some but disinterested in others. Also, if your revenue generating, you should seriously consider bootstrapping further. Revenue is treated very strangely in early-stage investing and *might* work against you. AngelList is a great way to research investors but not effective in actually connecting with them. Find investors who you are confident will be passionate about what you're doing based on prior job experience or what you know they are investing in. Happy to talk in a call to help explain this further if you need more clarity.TW
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When raising money how much of equity do you give up to keep control? Is it more important to control the board or majority of shares?
It entirely depends on the kind of business you have. If you have a tech startup for example, there are pretty reliable assumptions about each round of funding. And a business plan and financial forecasts are almost totally irrelevant to sophisticated tech investors in the early stages of a company's life. Recent financial history is important if the company is already generating revenue and in that case, a twelve-month projection is also meaningful, but pre-revenue, financial forecasts in tech startups mean nothing. You shouldn't give up more than 10-15% for your first $100,000 and from that point forward, you should budget between 10-20% dilution per each round of subsequent dilution. In a tech startup, you should be more nervous about dilution than control. The reality of it is that until at least a meaningful amount of traction is reached, no one is likely to care about taking control of the venture. If the founding team screws-up, it's likely that there will be very little energy from anyone else in trying to take-over and fix those problems. Kevin is correct in that the board is elected by shareholders but, a board exerts a lot of influence on a company as time goes-on. So board seats shouldn't be given lightly. A single bad or ineffective board member can wreak havoc on a company, especially in the early stages of a company's life. In companies outside of tech, you're likely going to be dealing with valuations that are far lower, thus likely to be impacted with greater dilution and also potentially far more restrictive and onerous investment terms. If your company is a tech company, I'm happy to talk to you about the financing process. I am a startup entrepreneur who has recently raised angel and VC capital and was also formerly a VC as part of a $500,000,000 investment fund investing in every stage of tech and education companies.TW
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What percentage of VC funded startups make it to 100m+ revenues in 5 years or less?
100M+ in revenues in 5 years or less does not happen very often. As an example of one sector, here is an interesting data visualization (circa 2008) of the 100 largest publically traded software companies at that time that shows their actual revenue ramp-ups from SEC filings (only 4 out of these 100 successful companies managed this feat, which themselves are an extremely small percentage of all of the VC-funded software companies): How Long Does it Take to Build a Technology Empire? http://ipo-dashboards.com/wordpress/2009/08/how-long-does-it-take-to-build-a-technology-empire/ Key findings excerpted from the link above: "Only 28% of the nation’s most successful public software empires were rocketships. I’ve defined a rocket ship as a company that reached $50 million in annual sales in 6 years or less (this is the type of growth that typically appears in VC-funded business plans). A hot shot reaches $50m in 7 to 12 years. A slow burner takes 13 years or more. Interestingly, 50% of these companies took 9 or more years to reach $50m in revenue."MB
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