#SWAAYthenarrative
BETA
Close

How To Improve Your Odds When Facing An Angel Investor

Business

Angel investors are in many ways vital to the success of a startup or entrepreneur's idea. They can inject much needed seed or early stage funding to catalyze growth and success for founders and entrepreneurs. Having angel backing can set you up for future venture capital funding as well.


However, finding and dealing with angel investors can prove a bit challenging. There are less than 300 angel investors actively investing in startups with only about 60,000 investments happening per year. In fact, angels fund less than a percent of all startups.

With that being said, angel investors do play a major role in startup growth. They actively seek founders and entrepreneurs with marketable products and services previously untested. This makes them a more attainable funding option than banks or small business lenders.

Angel Investors love the opportunity their investments can provide. For founders and entrepreneurs, partnering with an angel has monetary benefits, as well as serving up unprecedented knowledge and industry networking opportunities

The following serves as your roadmap to finding and dealing with angel investors to help bring your vision to life.

How to Find Your Angel

Finding an Angel Investor may be a little easier than you think. There are a number of places online and in your community to draw angel investor attention from. From online angel platforms to conferences, here are a few places to find your first angel:

  • Online Angels: Are you spending countless hours on LinkedIn sending potential angel investors messages in hopes of starting a conversation about your startup? This is common, and not a horrible strategy, but there is an easier way. Online sites, like the Angel Investment Network or Gust can help you land an angel easier.
  • Angel Events: You can take your angel investor search offline as well. There are plenty of angel events around the U.S. to help you make a meaningful connection with an investor as passionate about your startup or entrepreneurial endeavor as you. Startup Grind and the Angel Capital Association Summit (ACA) are all great events to start a conversation about your startup.
Dealing with Angel Investors

After you have made a few angel connections, it is time to start the conversation. One faux pa of dealing with angel investors is to cold pitch them in a conference elevator, at a coffee shop, or via long email. This is borderline stalking, and not a great way to attract attention for your startup.

There is a bit of tact involved in pitching your startup and asking for funding. Before you even start looking for an angel, have a pitch strategy ready to go, because just rambling on about your product or service, and how great it is, won't get the deal done.

A few pitch-ready ideas to have at the ready when dealing with an angel investor include:

Your unique story, because angels love a great entrepreneurial story that inspires them. Engaging an angel from the heart is the best way to get them interested.

A high-level of confidence to get the job done, since angels are entrusting you with thousands of dollars to be successful. They want to know you are the founder that will leverage their investment for the best possible ROI.

Current profits and future projections with the backing an angel investor can provide. Be sure to have an exact number in mind that you know will have an impact on your startup. An exact figure will show an angel you have done your homework.

Concise information that doesn't beat around the bush, because angel investors are busy and don't have time to listen to a two-hour pitch. A pitch should be no longer than 20 minutes, and that is pushing it.

Be Prepared for an Angel Interrogation

Maybe interrogation is a bit over-the-top, but as a founder or entrepreneur, you should be ready to field the borage of questions an angel will ask. Questioning can be about marketing plans, financial information, and even questions about you and your team.

Financial questions include:

How much capital do you need, and how long do you expect it to last?

What are your financial projections and growth rate for the next three to five years?

What are the major costs involved with bringing your product or service to market?

Is there any potential unforeseen expenses involving production?

What are the projected gross margins with this investment?

Startup team questions include:

Who are the main founders, partners, and team members?

How many employees are there (HQ and outsourced)?

What is the combined experience of the team (tech, industries, etc.)?

Are their team growth needs in the coming two years?

Why are you a good founder?

What additional skills are needed to grow the team?

Marketing questions include:

What is the marketing and PR strategy?

Is there a social media strategy in place?

What are the analytics of these strategies?

What is the cost of the customer acquisition?

How will you boost marketing and PR with the investment?

What is the current customer lifetime value?

Don't be offended by the direct nature of these types of questions. An angel investor is exposed to a variety of risks when investing in a startup. They are simply trying to mitigate these risks as quickly as possible to move the potential partnership forward in an expedited, powerful way.

What Does an Angel Investor Want?

Landing an angel investor provides you with a stellar opportunity to fund your startup to success. However, angel funding isn't free. When partnering with an angel, it is important to know that the investment has a few strings attached.

For example, an angel investor may want equity in the company. This could be a high percentage, or a meager one, depending on the agreement you have with your angel.

Giving up equity in your startup means that you are no longer the sole decision maker. Some angels are hands-off investors, but some want to be involved in some way to ensure they are going to get a satisfactory ROI.

Having an involved angel isn't necessarily a bad thing. They have the industry knowledge and the connections that can facilitate growth much faster than if you are making decisions alone. The negotiation stage is important, so be sure to know that angel investments are certainly not free.

Find Your Angel Today

Finding and dealing with angel investors is an exciting moment for any founder or entrepreneur. Just be sure to do it the right way. From being pitch ready to knowing what angels will ask, have a strategy in place to land your first angel with ease. Have you had success in getting angel investor funding? Tell us your secrets!

Our newsletter that womansplains the week
8min read
Politics

Do 2020 Presidential Candidates Still Have Rules to Play By?

Not too many years ago, my advice to political candidates would have been pretty simple: "Don't do or say anything stupid." But the last few elections have rendered that advice outdated.


When Barack Obama referred to his grandmother as a "typical white woman" during the 2008 campaign, for example, many people thought it would cost him the election -- and once upon a time, it probably would have. But his supporters were focused on the values and positions he professed, and they weren't going to let one unwise comment distract them. Candidate Obama didn't even get much pushback for saying, "We're five days away from fundamentally transforming the United States of America." That statement should have given even his most ardent supporters pause, but it didn't. It was in line with everything Obama had previously said, and it was what his supporters wanted to hear.

2016: What rules?

Fast forward to 2016, and Donald Trump didn't just ignore traditional norms, he almost seemed to relish violating them. Who would have ever dreamed we'd elect a man who talked openly about grabbing women by the **** and who was constantly blasting out crazy-sounding Tweets? But Trump did get elected. Why? Some people believe it was because Americans finally felt like they had permission to show their bigotry. Others think Obama had pushed things so far to the left that right-wing voters were more interested in dragging public policy back toward the middle than in what Trump was Tweeting.

Another theory is that Trump's lewd, crude, and socially unacceptable behavior was deliberately designed to make Democrats feel comfortable campaigning on policies that were far further to the left than they ever would have attempted before. Why? Because they were sure America would never elect someone who acted like Trump. If that theory is right, and Democrats took the bait, Trump's "digital policies" served him well.

And although Trump's brash style drew the most handlines, he wasn't the only one who seemed to have forgotten the, "Don't do or say anything stupid," rule. Hillary Clinton also made news when she made a "basket of deplorables" comment at a private fundraiser, but it leaked out, and it dogged her for the rest of the election cycle.

And that's where we need to start our discussion. Now that all the old rules about candidate behavior have been blown away, do presidential candidates even need digital policies?

Yes, they do. More than ever, in my opinion. Let me tell you why.

Digital policies for 2020 and beyond

While the 2016 election tossed traditional rules about political campaigns to the trash heap, that doesn't mean you can do anything you want. Even if it's just for the sake of consistency, candidates need digital policies for their own campaigns, regardless of what anybody else is doing. Here are some important things to consider.

Align your digital policies with your campaign strategy

Aside from all the accompanying bells and whistles, why do you want to be president? What ideological beliefs are driving you? If you were to become president, what would you want your legacy to be? Once you've answered those questions honestly, you can develop your campaign strategy. Only then can you develop digital policies that are in alignment with the overall purpose -- the "Why?" -- of your campaign:

  • If part of your campaign strategy, for example, is to position yourself as someone who's above the fray of the nastiness of modern politics, then one of your digital policies should be that your campaign will never post or share anything that attacks another candidate on a personal level. Attacks will be targeted only at the policy level.
  • While it's not something I would recommend, if your campaign strategy is to depict the other side as "deplorables," then one of your digital policies should be to post and share every post, meme, image, etc. that supports your claim.
  • If a central piece of your platform is that detaining would-be refugees at the border is inhumane, then your digital policies should state that you will never say, post, or share anything that contradicts that belief, even if Trump plans to relocate some of them to your own city. Complaining that such a move would put too big a strain on local resources -- even if true -- would be making an argument for the other side. Don't do it.
  • Don't be too quick to share posts or Tweets from supporters. If it's a text post, read all of it to make sure there's not something in there that would reflect negatively on you. And examine images closely to make sure there's not a small detail that someone may notice.
  • Decide what your campaign's voice and tone will be. When you send out emails asking for donations, will you address the recipient as "friend" and stress the urgency of donating so you can continue to fight for them? Or will you personalize each email and use a more low-key, collaborative approach?

Those are just a few examples. The takeaway is that your online behavior should always support your campaign strategy. While you could probably get away with posting or sharing something that seems mean or "unpresidential," posting something that contradicts who you say you are could be deadly to your campaign. Trust me on this -- if there are inconsistencies, Twitter will find them and broadcast them to the world. And you'll have to waste valuable time, resources, and public trust to explain those inconsistencies away.

Remember that the most common-sense digital policies still apply

The 2016 election didn't abolish all of the rules. Some still apply and should definitely be included in your digital policies:

  1. Claim every domain you can think of that a supporter might type into a search engine. Jeb Bush not claiming www.jebbush.com (the official campaign domain was www.jeb2016.com) was a rookie mistake, and he deserved to have his supporters redirected to Trump's site.
  2. Choose your campaign's Twitter handle wisely. It should be obvious, not clever or cutesy. In addition, consider creating accounts with possible variations of the Twitter handle you chose so that no one else can use them.
  3. Give the same care to selecting hashtags. When considering a hashtag, conduct a search to understand its current use -- it might not be what you think! When making up new hashtags, try to avoid anything that could be hijacked for a different purpose -- one that might end up embarrassing you.
  4. Make sure that anyone authorized to Tweet, post, etc., on your behalf has a copy of your digital policies and understands the reasons behind them. (People are more likely to follow a rule if they understand why it's important.)
  5. Decide what you'll do if you make an online faux pas that starts a firestorm. What's your emergency plan?
  6. Consider sending an email to supporters who sign up on your website, thanking them for their support and suggesting ways (based on digital policies) they can help your messaging efforts. If you let them know how they can best help you, most should be happy to comply. It's a small ask that could prevent you from having to publicly disavow an ardent supporter.
  7. Make sure you're compliant with all applicable regulations: campaign finance, accessibility, privacy, etc. Adopt a double opt-in policy, so that users who sign up for your newsletter or email list through your website have to confirm by clicking on a link in an email. (And make sure your email template provides an easy way for people to unsubscribe.)
  8. Few people thought 2016 would end the way it did. And there's no way to predict quite yet what forces will shape the 2020 election. Careful tracking of your messaging (likes, shares, comments, etc.) will tell you if you're on track or if public opinion has shifted yet again. If so, your messaging needs to shift with it. Ideally, one person should be responsible for monitoring reaction to the campaign's messaging and for raising a red flag if reactions aren't what was expected.

Thankfully, the world hasn't completely lost its marbles

Whatever the outcome of the election may be, candidates now face a situation where long-standing rules of behavior no longer apply. You now have to make your own rules -- your own digital policies. You can't make assumptions about what the voting public will or won't accept. You can't assume that "They'll never vote for someone who acts like that"; neither can you assume, "Oh, I can get away with that, too." So do it right from the beginning. Because in this election, I predict that sound digital policies combined with authenticity will be your best friend.