Struggling to find financing is one of the harshest realities of startup life — with several businesses essentially starting from scratch. According to a2019 study from SCORE, 42% of entrepreneurs are bootstrapping, starting with less than $5,000 in cash reserves.
When startup founders hit a certain point — often after dipping more into their savings than they'd like or exhausting what family and friends are willing to chip in — they start to explore other courses. One of the more attractive yet challenging options is landing an angel investment.
Here, we'll go over what an angel investor is, review the best angel investor networks, see the pros and cons of working with angel investors, and go over some tips to help you maximize your chances of receiving this kind of funding. Let's jump in.
What is an angel investor?
An angel investor is a typically wealthy individual who provides capital to startups in exchange for equity. These kinds of investors tend to support early-stage startups — ones that aren't in a place to appeal to a wider base of investors quite yet.
Angel investors generally look for promising startups in their seed or Series A rounds of financing and offer those businesses injections of much-needed capital to help get them off the ground.
Let's take a closer look at what they do.
For most early-stage startups, angel investors represent the bridge between self-financing or sourcing funds from friends and family and receiving investments from established venture capital firms.
Angel investors typically have high net worths and extensive business experience that they can leverage to help the companies they fund. Once they've invested in a startup and received their appropriate公平, they usually assume an advisory role for that organization's leadership.
In most cases, they invest in industries they're familiar with — a trend that can make them excellent networking resources for startups. They're often well connected and can refer founders to other private investors as their businesses mature.
For a closer look at what angel investors do, check out this video fromInvestor Trading Academy
Best Angel Investor Networks
AngelList标榜自己是世界上最大的明星tup community. The platform doubles as an angel investment resource and a network for job seekers. Its investment side — AngelList Venture — provides two funding options for founders: recurring transfers and roll-up vehicles.
Recurring transfers offer rapidly growing companies the means to offer employees and early investors liquidity on a regular, rolling basis. That said, this option is reserved for businesses with valuations of over $100 million with notable VC investors.
Roll-up vehicles, on the other hand, are more widely available for startups of most sizes. This method gives founders a single link that allows investors to commit and send funds online. From there, AngelList handles the administrative side of the process — including all filings, tax documents, and distribution management.
Best for Startups Looking for More Than Funding
AngelList offers resources for startups that extend well beyond funding. The platform can help connect startups with job seekers, handle incorporation, and assist with equity management — among other perks. If you're looking for a "one-stop-shop" solution that provides more readily accessible funding options than other networks, consider looking into AngelList.
Pricing: Register for Pricing Information
The Angel Investment Network is a resource that can connect entrepreneurs with a pool of close to 300,00 active investors. It offers a straightforward, accessible template for founders to structure their pitches.
从那里,企业家可以发布那些pitches for angel investors on the platform to browse. If your post catches investors' attention, they can reach out via the network's in-application messaging function — allowing you to either receive funding or expand your personal network.
Best for Startups Looking for an Accessible Platform
The platform offers four tiers of listing options ranging from free to $1,999 — with varying degrees of reach, visibility, and listing length. With a wide range of posting options that can suit startups with virtually any budget, Angel Investment Network is a solid choice for anyone pursuing angel investments.
Republic is a prominent investor-centric angel investment network. The platform is primarily tailored towards individuals interested in investing in thoroughly vetted, high-upside startups, real estate ventures, crypto plays, and video games.
It's essentially a sophisticated crowdfunding program that democratizes angel investing. Prospective investors can invest as little as $100 per startup at a time. Its accessible interface gives users immediate insight into the companies they're interested in funding — along with each business's valuation cap.
The program has a simple yet rigorous application process for entrepreneurs to list on the site. But once you're in, you're given tremendous visibility to a host of potential supporters — from seasoned VCs to small-time contributors — and the opportunity to raise up to $5 million per campaign.
Best for More Mature Startups, Prepared to Pass Rigorous Screening
Republic is an extremely exclusive platform for startups. It's not easy to pass its screening process and get listed on the site. So if you're only just starting to piece your business together, you're going to have a hard time landing on its front page — but if your company is a bit more well-established with demonstrated upside, Republic can be an invaluable resource.
Pricing: Packages Starting at $300 per Year
Gust is an investment community, boasting a network of over 800,000 founders and 85,000 investment professionals. The platform offers the means to connect with angel investors, but its functionality and merit aren't limited to that.
The program also helps you grow your startup by providing performance benchmarks, actionable feedback, and clear next steps for your company as it matures. Gust is tailored to help startups of every stage from seed funding to Series C.
It also has impressive resources for investors and accelerators. With low-priced packages available, it's an excellent resource for startups of virtually any size as they mature and establish themselves in their respective industries.
Best for Startups Looking for Comprehensive Guidance
对于创业者来说,阵风的历史l angel investment network and more of a comprehensive assistance platform that happens to have an angel investment-oriented element. So if you're in the market for a program that will help you bolster the legal and financial elements of your business — all while providing access to investors — you might want to give Gust a closer look.
FundersClub is another exclusive, competitive service for startup founders. It only accepts around 2% of its applicants — but if you make it through the application process, you'll be in an excellent place to attract and connect with angel investors.
The network boasts an impressive list of alumni — including Instacart, Coinbase, Flexport, and GitLab. The platform also recently added a network search function where founders can search for and automatically request intros with potential investors.
FunderSclub为初创公司提供了独特的组合，具有排他性，声望，可见性，访问性和易用性 - 但这仅伴随着您表现出巨大的吸引力和合法潜力的能力。正如我提到的，绝大多数初创公司不符合该平台的严格标准。
Pros and Cons of Working With Angel Investors
Pro: It's relatively low risk.
Con: You forfeit some control of your business.
Angel investors aren't fronting you capital for nothing. They typically assume some degree of ownership or equity in your startup in exchange for their investment.
因此，如果您进行天使投资，则希望您能够控制公司的某些控制权 - 您为投资者提供的利益可能足够重要，可以对您的公司经营公司的能力产生重大影响。bob全站app
Pro: Angel investors tend to be business-savvy.
许多天使投资者本身就是成功的商人 - 他们通常经验丰富，明智且足够聪明，可以积累足够的钱来为初创企业筹集资金。而且，如果您接受他们的投资，则可以以可行的建议和指导形式利用他们的知识和商业敏锐度。当您击中障碍或应对越来越多的痛苦时，这可能会派上用场。
Con: You ultimately have to kick up some of your profits.
Obvious as this might sound, it's still worth pointing out — an angel investment isn't free funding. If your business goes the distance and starts to turn a profit, you're going to have to kick some of that money up to your angel investors, based on how much equity you gave them for their initial investment.
Pro: Angel investors often have a personal stake in your success.
Angel investments are financial transactions that often have a personal edge to them. Your investors want to see you succeed — for both your sake and theirs. That's why many are willing to be a valuable resource to help put you in touch with the right people and navigate the murky waters of startup life.
Though an angel investor's personal investment in your business is often beneficial, it can also be smothering. Some investors take an approach that's a bit more hands-on than certain founders would like. You want your angel investor to offer you an appropriate balance of trust and guidance — it can be frustrating if they overdo the latter.
How to Get an Angel Investment
1。Make sure you're all the way ready.
Angel investors generally aren't going to dole out cash if you pitch a neat idea without some kind of tangible backing. They're信任您进行了潜在的大量投资 - 因此，自然而然，您需要证明自己trustworthy。
Your product or service needs to be either complete or near completion — you need your tech to be sound with tremendous upside. In most cases, you'll also need to have existing customers or a significant base that you can convincingly demonstrate will buy from you.
如果你想天使投资没有土地se key elements prepared — among others — you're going to face an uphill battle. Any angel investment takes some degree of faith, but savvy investors don't go in blind.
他们想最大程度地降低投资背后的风险。做好充分的准备 - 使用准备发行的产品或服务有效地出售它的产品或服务，可以放心，使他们倾向于为您的业务筹集一些严重的资金。
Connections with angel investors don't come out of the sky. You can't bank on a potential investor happening upon your early-stage startup on their own and passing along a six-figure investment out of the kindness of their heart. As lovely as that prospect might sound, it's a starry-eyed daydream — not a legitimate plan for sourcing capital.
在许多情况下，您会通过推荐与天使投资人联系 - 专业联系通常是通往天使投资的最有效道路。因此，如果您想最大限度地找到有兴趣的资助者的机会，则需要建立网络。
Consider attending localangel investor events— they pop up around the country periodically and provide excellent opportunities to connect with potential funders.
Industry-specific organizations can also help you gain traction when it comes to linking up with angel investors. Joining and remaining active in those kinds of groups can put you in touch with like-minded entrepreneurs who can connect you with funders interested in your space.
3。Thoroughly research who you're trying to connect with.
You don't want to go into a meeting with an angel investor blind. These kinds of connections can be hard to come by, so you want to put yourself in a position to make the most of them. That starts with thorough research on your potential funder, their investment history, and their professional credentials.
Angel investors (or groups of angel investors) tend to have their own processes for landing on the startups they want to fund. So take the time to see who they've funded previously, their areas of expertise, and the kind of capital they usually put up — if possible.
An effective presentation is thoughtfully tailored. It speaks to the specific interests of the people on the other side of it. If you want to maximize your chances of landing an angel investment, you need to have a firm grasp of what your investors want to hear.
4。Have a thoughtful, effective, concise elevator pitch ready.
Connecting with angel investors isn't always some carefully calculated process you conduct online. In some cases, you might meet one in person at a networking event or some other kind of professional function.
In those cases, you need to have a well-craftedelevator pitchthat reconciles being informative with being concise: a quick, to-the-point speech that conveys your startup's essence.
Yours should be compelling and attention-grabbing — covering who you are, what your company does, and your unique value proposition — and end with some sort of call-to-action.
正如我所说，发现天使投资者并不总是有时间来源的长期，来回交流。这可能是很短的时刻 - 因此，请准备在短窗口中传达信息。
Once you've connected with a potential angel investor, you'll need to maintain accessible, active lines of communication with them. The chance to present for an angel investment typically comes after some back-and-forth.
Very few — if any — angel investors will front you cash after a single conversation. They're probably going to do their due diligence, taking the time to feel you out and better understand you and your business.
Actively communicating with them helps facilitate that process, keeps you top-of-mind, and allows you to determine whether landing an investment from them is viable. Bear in mind, "active" doesn't mean "pushy." If you constantly badger them with messages and voicemails, you might undermine their positive perception of you.
您想证明自己坚持不懈 - 您将奉献自己的投资，但同时，您不想因为绝望或浪费太多的时间和精力而脱颖而出。这是一个微妙的平衡，但是如果您想证明自己的价值而不会挫败潜在的投资者，则需要进行罢工。
6. Make sure you want to work with them.
That "feeling out" process with investors I mentioned goes both ways. You need to communicate with potential investors to make sure you're on the same page — to know for sure that you have matching priorities and compatible work styles.
Angel investments are often hard to come by, so unless your business is poised to take off — with traction, a lucrative market, and the right people behind it — you might want to wait before allocating too much time to the process of landing one. But if you think you're there, connecting with an angel investor can provide a much-needed influx of capital that can help set your big plans in motion.