November 2, 2022

Lessons from working with 100+ angels — what founders need to know

From building a list to sending an email, here’s how to approach angels

Miruna-Ioana Girtu

Angel investors are key to a healthy startup ecosystem — they’re often the first money into a company, helping great ideas and teams get off the ground. 

Having worked with 100+ angel investors, I've seen how founders can compromise their chances of successfully raising from them. 

So, to better navigate the fundraising process, here’s what founders need to know: 

Do your research, build a target list of investors and personalise messages

  • Put together a list of relevant investors. It’s true that some investors keep their profiles intentionally vague or private but in cases where they don’t, you have no excuse — make sure that their investment focus is aligned with your vision. 
  • Ask your network for recommendations but also be proactive in exploring Linkedin, Twitter and having a look at lists of emerging angels, most active angels, European female angels etc. You can also look up angel networks like Alma or funds that have angel programmes like Atomico. You can even find angels on the UK's Companies House. If you identify and pre-qualify an angel yourself, it’s much easier to see who in your network is connected to them and reach out asking for that specific intro, instead of just asking “do you know any angels?” 
  • Be smart in your approach. Don’t just send a mass email. Include why you think the angel would be interested in what you’re building. Even if you can write a really good cold email, do try to get a warm intro. It increases your chances that the email is going to cut through the inbox noise. Provide your mutual contact with a short paragraph that can be easily forwarded to the angel. 

Be persistent but not pushy

  • Angels don’t have an investment mandate. They are not employed by anyone to do this, so they can decrease, pause or increase their investment activity as and when they best see fit.
  • Follow-ups are part of the process (you can ask if they need any further information from you to make a decision) but know when to stop chasing. Even if not all investors are clear enough in the way they phrase a yes, a maybe, or a no — if they're interested, they’re going to make it obvious. Don’t fall into a wishful thinking trap. “Sounds good” doesn’t translate to “I want to invest”. 
If you steer away from pure pitching and move towards having a conversation, both parties can learn more
  • Time is precious, so learn to appreciate a quick no. If it’s a "no for now" but they mention they'd be interested in following progress, do stay in touch, send them updates, build a relationship and that might bear fruit when the next round comes. If you steer away from pure pitching and move towards having a conversation, both parties can learn more.  

Understand an angel’s motivation for investing and their approach to portfolio engagement

  • Angels can have different motivations beyond just making money. These can be anything from intellectual stimulation and learning to networking with founders and (co)investors, giving back or recognising potential impact.
  • Angels also have specific ways in which they prefer to engage with their portfolios. The rapport you establish with the investor early on can be indicative of the future relationship. Some angels are more hands-on and their involvement will come with a mentorship component, while others are more passive.
  • Understanding their motivations and their post-investment style can help you better manage the relationship with them.

Don’t bury the lead

  • You and your team are the lead. Make sure you highlight why you're building what you’re building and why you stand a chance to win in this market. Market and product matter, but don’t forget to highlight the fit between the core team and the problem you’re solving. However good an idea might be, investors need to know that you are the team that can execute it.
  • At the earliest stages, people are often the biggest asset the startup has. It’s up to the team to process market feedback and navigate all the iterations, tweaks and pivots.
  • Angels invest in founders and that can transcend one startup. I’ve seen many cases of angels continuing to back a founder’s new endeavour even if they failed previously and lost all the investor’s capital. Experienced angels are very aware of the fact that a startup can fail despite the best intentions and efforts of the founders. 

Put their ticket size in context 

  • When thinking about the mix of investors they want, founders usually look for a balance — not too many investors, not too few. 
  • What I encourage founders to do is put the angel ticket sizes in context. For example, don’t impose an arbitrary rule around having a $100k+ minimum ticket size, especially in the early rounds. Accepting a smaller ticket size from a relevant angel can be a very wise decision. 
Smaller ticket sizes are not that uncommon anymore
  • It’s all relative. For their wealth and the overall amount they dedicate to angel investing, this might be a significant commitment for them. Also, there’s no rule to say that the bigger the investment, the more conviction they have or the more help they will provide. 
  • In fact, smaller ticket sizes are not that uncommon anymore. This is great news for a new wave of angels who are challenging the angel stereotype.