If your startup is looking for an angel investor, it makes sense to present your plan to flocks of angels, and assume that at least one will swoop down and scoop you up. Or does it? Actually numbers and locations are just the beginning. The challenge is to find the right angel for you, and for your situation. Here are some basic principles:
- Angels invest in people, more often than they invest in ideas. That means they need to know you, or someone they trust who does know you (warm introduction). For credibility, they need to know you BEFORE you are asking for money.
- Angel investors are people too. Investors expect you to understand their motivation, respect their time, and show your integrity in all actions. They probably won’t respond well to high pressure sales tactics, information overload, or bribes.
- Angels like to “touch and feel” their investments, so they are generally only interested in local opportunities. It won’t help your case or your workload to do an email blast and follow-up with 250,000 members around the world.
But now to answer one of the most common questions I get “How do I find angel investors?” With today’s access to the Internet, and Google searches, it really isn’t that hard. Here are the largest flocks:
- Gust (formerly AngelSoft). This is perhaps the most widely-used source of information on angel investor groups across the world, run by the “Father of Angel Investing in New York,” David Rose. This software platform is used by many local angel organizations for managing deal flow.
- AngelList. This is another very popular website for raising equity or debt investments for startups. It was founded back in 2010 by Naval Ravikant and Babak Nivi of Venture Hacks, which is also a great place to visit for startup advice.
- Keiretsu Forum. This one claims to be the world’s largest single angel investor network, with 3000 accredited investor members throughout 52 chapters on 3 continents. Since its founding in 2000, its members have invested over $800 million dollars in over 800 companies in technology, consumer products, healthcare/life sciences, real estate and other segments with high growth potential.
- USA Angel Investment Network. This group claims to be the largest angel investment community in the world. They have already raised $300 million for startups in the US and across the world. A caveat is that this network doesn’t offer a personal touch, as it only facilitates the exchange of contact information, so the matchmaking is left up to you.
- Angel Capital Association (ACA). The ACA is the angel industry alliance, which now includes a directory to more than 250 angel groups and 14,000 individual angels across North America. ACA member angel groups represent a wealth of accredited investors and are funding approximately 800 new companies each year, and managing an ongoing portfolio of more than 5,000 companies throughout North America.
Gust claims to have facilitated over $1 billion of investments in 650,000 startups to date, via connection through their platform to over 85,000 angel investors in 190 countries. As an entrepreneur, you simply use their investor search engine to find appropriate investors for your business according to location, industry interest, and other relevant criteria.
AngelList has featured over 3 million businesses for potential investors in a format that is, effectively, a social network for entrepreneurs and angels. They claim to have already raised over $560 million for 1400 startups, primarily in the US and Europe. In addition, they serve as a jobs available site for 24,000 startups.
The Founding Chapter is in Silicon Valley, California, (naturally). A caveat is that this is a for-profit organization, so fees to present may be significant.
The reach is very broad, with a network has 30 branches extending to 80 different countries. They have over 1,700,000 registered members with over 300,000 investors and 1,400,000 entrepreneurs.
Of course, there are many more angel investors, often called “super angels,” that have a large following and large reach, so they don’t need any of these organizations to be found. Examples of some leaders in this space include Ron Conway, Mike Maples, Jr., and the founder of 500 Startups, Dave McClure. Connecting with one of these would be a real coup for your startup.
