5 Ways to Find Angel Investors

  1. BEYOND YOUR  NETWORK
  2. CUSTOMERS & PARTNERS
  3. EVENTS
  4. ACCELERATORS & INCUBATORS
  5. COLD PROSPECTING

1. Beyond Your Network

Founders & Entrepreneurs

You likely have friends that are also founders & entrepreneurs. They may have already raised funding
  • Ask for Help & Introductions
    • Don't pitch them - tell them you're interested in raising funding & ask for help in the form of an introduction!
  •  Most Angel Investors started as entrepreneurs 
    • Entrepreneurs & Founders in your network may be interested in investing in you 

Investors You've Missed

Just by virtue of being in the "startup game" you've likely met investors and you may have not even realized it

The GOLD is in their extended network 

The odds are that the investors you know aren't interested

But they likely know someone who fits you! 
  • You're looking for introductions to other investors they know

2. Customers & Partners

Believe it or not, a lot of entrepreneurs get investment from their customers and business partnerships that they have established. Although seldom discussed in the media, it's a natural occurrence

Be Careful with the Messaging

you do not want your customers & partners to think you're going out of business soon

  • Call your customers & partners "just to see how things are going" 
    • Make sure you're speaking with decision makers (CEO, CFO, etc.)
    • Make sure their happy with you
    • In person is preferred and phone call is better than email in this instance
      • You're looking for a conversation; not a transaction
    • Don't pitch them unless asked
    • Be relaxed and casually smile (even if you're on the phone - the intonation in your voice will help craft the tone of the conversation) 
  • After talking about them for a while, they will ask about you 
    • This is where you'll have to walk a thin line 
  • Phrase the effort as
    •  "Things are going really well. We're getting a lot of traction and we're actually beginning to seriously consider the prospect of opening an funding round to speed up product development & customer acquisition - did your company go through this stage?"
    • Note that the above says "to speed up product development & customer acquisition"; it does not say "we can't pay our rent so we need funding". One implies you're looking to speed things up and become big; it's exciting. The latter is depressing. 
  • The goal is to open a dialogue. If you're speaking with a decision maker who's in a position to invest, they will likely bring it up themselves 
    • If they don't bring it up; make the call whether to inquire if they would be interested or if it makes more sense to ask for introductions
  • If you're nervous and want to practice - work the above on your smallest clients as a dry run before tackling the real prospects

3. Events

Be seen & Network. Events are a great place for that. You will need to become a social butterfly. Don't like the idea of having to be a social butterfly? Suck it up!

a few networking tips

  • Pick an appropriate event
    • Don't look for investors at AA meetings
  • No event is too far if it has a real prospect of you meeting an investor 
    • It's in a different city or state? So what? 
      • Hop on a flight! If you're broke, rent a car and stay in a cheap motel, but make it to the event 
    • Don't get stuck talking to one person for too long unless the conversation is leading somewhere
    • Prepare questions & statements for the following points in the conversation:
      • introduction
      • get the conversation going
      • change the subject 
      • end the conversation and move on
    • You're there to find investors, not talk about the weather
  • Arrive early - especially if you're not comfortable networking - the extra time there will help you get acclimated
  • Stay late - the others who stay late are likely actively networking and they're serious about helping others and vice versa

4. Accelerators & Incubators

Startup accelerators are fixed-term programs focused around advisory, mentorship, sales training, and general education for startup entrepreneurs. They're a great place to find investors because they often include a seed investment component and provide you with the exposure to an investor community. 
  • If you're in an entrepreneur rich community, there are likely tons of accelerator programs around you to choose from
    • If not, then you might want to consider applying and traveling to one that is best suited for you 
  • If you're going to invest the time in an accelerator, make sure it has great entrepreneurs, advisers, and mentors in it 
    • as well as access to a community of investors
    • people involved shape the quality of an accelerator

5. Cold Investor Prospecting

You should be deploying this one from day one in conjunction with the rest of the strategies because cold prospecting takes time when done right. Response time and outreach intervals makes this process slow, but overall, it's the "bread and butter" of finding investors for entrepreneurs who have a limited network or have already exhausted it. 

LinkedIn for Cold Prospecting Investors

The Platform of Choice

LinkedIn is amazing in that once you've connected with someone, you can message them right away. You know it. You've probably used it to get customers even. The problem is that LinkedIn is becoming a bit of a spam nightmare so it's decreasing in effectiveness, but it's still an amazing research tool.

Steps to Investor Prospecting on LinkedIn

Step 1

Upgrade to LinkedIn Sales Navigator 
  • This feature gives you really powerful search abilities

Step 2

Search for Investors
  • You'll get a LOT of results
  • Be aware that "Angel Investor" & anything with "Investor" is a vanity title & a lot of the results you'll see aren't active investors
  • But a relatively small percentage of them will be active investors seeking new opportunities - it's still a large number 
    • your job is to find these people

Step 3

  • Send a personalized connection request to everyone that seems to be in your industry and space
    •  An tiny fraction of the results you'll see will be interested in investing in you; your job is to figure out who those people are.
    • This is a lot of work, but you can do it from your couch 
    • Some of them will accept
  • Send a "thanks for connecting" message 
  • Once they respond ask whether they are open to new investments