Step by Step Guide to Approach Angel Investor for your Startup

Detailed Step by Step Guide for Startup Founder to find the Right Angel Investors for your Startup in 2022 | Jordensky

Step by Step Guide to Approach Angel Investor for your Startup

If you are an startup founder, you may be looking for various sources of funding to grow your business, including angel investors.

Finding an angel investor in India is like finding a needle in a pile of needles. Many of them need to be categorized before finding the right ones.  

As an entrepreneur, you would have laid the foundation by raising money from savings. But when you're ready to push your goals further and make your business successful, finance is the biggest hurdle you'll have to overcome.

For entrepreneurs, the importance of early funding by angel investors and their ability to evaluate business models, develop pilot projects and connect with the first customer is very important. As the founder you may be wondering if you need paid services to find an investor, but certainly not. You can find angel investors for free by using the right network channels and using social media efficiently.

Many meetings are needed to find the right angel investor. That's more than many entrepreneurs expect. Fortunately, there is a strategy, this does not guarantee 100% success, but we believe it maximizes the chances of success for the support you need.

Read this article to unleash a powerful way to find angel investors in India.

How to approach Angel Investor for your Startup

1. Master LinkedIn

Start by creating two lists. One is an angel investor who has relevant expertise or is well connected in the field of interest, and the other is people you know or can refer to. You can create these on simple excel sheet. Sweet spots are people on both lists-they are your starting point. But as you'll see later, it makes sense to keep two lists.

2. Target Angel Investors in your niche

Apparently, it doesn't make sense for D2C entrepreneurs to approach healthcare-savvy investors. Angel investors who are experts in a particular industry are familiar with your concepts and ideas. In addition, an established network with other reputable investors can help your business grow and grow in the long run. It will be a plus if you find someone you can get along with.

3. Track Record

Showing the successful track record of your previous venture can convince angel investors to join and invest their capital in your company. No investor wants a zero or negative return on the capital they invest in. With the availability of your historical records, angel investors will believe that when the right funds are available, you can drive your startup to next stage.

4. Focus on feedback

Do not use the meeting to request money. Instead, use your time to share ideas, business plans, and progress to date. Get the advice you can get. Your goal is to get someone excited about what you are doing and get an agreement to stay in touch. Everyone knows you need money, but few investors write checks based solely on the first meeting.

5. Plan to drink a lot of coffee

Finding the right angel investor requires more meetings than many entrepreneurs expect but these meetings are a great opportunity, even if they don't lead to funding. When talking to people, refine your investment pitch. You will need 90 seconds and 5 minutes version in which you should be able to cover:

  • why your startup is important
  • Why it's important now
  • Your team
  • Your product and market
  • Market launch plan
  • Customers, Prospects, Growth Strategy

What Angel Investors Want From Startups  

To attract investors, you need to get their attention to believe in your ideas. You are looking for a comprehensive understanding of your team, your business, market prospects and future plans.

1. Your Team

Investors are looking for passionate and dedicated team members. Confirm your commitment to startup. Describe the educational background and professional background of the co-founders and colleagues who support your company. If applicable, mention previously successful ventures. If the  angel investor asks about your weaknesses, be honest and share your plans for overcoming obstacles.  

2. Data

Layout your investor's business analysis, from current metrics to future forecasts. This includes revenue growth, net revenue, runway (cash flow forecasts), industry multiples (average return on investment of companies in the industry), and customer costs. Customer acquisition and lifetime value. Please prepare these in advance so that the presentation will proceed smoothly.  

3. Market Intelligence

Investors want to know their biggest competitors and market share. Is it an emerging market or an existing market? What does the future of expansion look like?

4. Investment Planning  

Of course, angel investors need a detailed plan of how as a founder you intend to spend their money. Be honest about the potential risks that may arise.  

5. Growth, Challenges, and Strategies

Consider your business growth plans, the challenges you face / may face, and how you intend to address them. To validate your idea, mention the traction you had, whether it was a successful product, partnership, or customer.

6. Prioritizing Proper Research

If you are new to the startup world, the first thing you need to do is select your target audience and understand their needs and preferences. Angel investors have invested in a variety of products and services over the years, but don't believe that they will invest in your startup by presenting vague ideas. They will only invest in you if you are impressed with your research and knowledge. It is important to remember that being an entrepreneur is a long-term endeavour and you must be patient and tenacious in your research. Keep trying to approach different investors inside and outside the industry until you can secure your investment.

Final Remarks

Early on, companies need strong support and guidance to reach every stage of progress. Seeking support from an experienced and knowledgeable entrepreneur like an angel investor will usually have a huge amount of capital and will make your startup successful by investing in a startup and regaining stock. All you have to do is research, trust, and risk.  

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