In our last article, we took you with around 30 angel investors who are actively investing in various startups across various sectors.
And let’s say, you have laid the foundation of your startup but now it’s time to push it ahead – and you are seeking funds. Seeking funds is never a piece of cake but a process that needs to be implemented in the most precise manner, since angel investors are always flooded with applications.
Today, we will guide you on how to start approaching investors (or any of those 30 investors in our last article) and increase your chances of scoring funding to accelerate your startup.
First, you need to understand the mindset of an Angel Investor.
For that, you need to understand that amidst a sea of options, what are they looking for in a startup? Sure, they are looking for an idea that solves a problem, but more than that they are looking for –
- Vision and core beliefs of the founders
- Good management team
- Target market size of the startup
- Traction and scalability
- Reasonable valuations
- Viable exit strategies.
Now when you have framed your startup as per the abovementioned interests of the angel investors, you begin the process of approaching them.
Here are the four steps you need to diligently follow to successfully approach Angel Investors.
- Prepare your Pitch Deck – The importance of a pitch deck can never be underestimated. You will require it at every step to properly introduce your idea, business model, and team members to potential investors when they agree to hear you out. This should be your first task before approaching any angel investor. The deck must be simple yet powerful and persuasive. A deck is worth more than 1000 words. It should also cover all the elements of your business.
Our Little Tip – Additionally, based on the deck and your business idea, be ready for tough questions from the angel investors. So study your market and be aware of the challenges.
- Build your product/service prototype – Angel investors believe in action more than jargon. You need to show them that you have worked on your idea as much as you want them to invest in it. Therefore, start working on a practical demonstration of your product/service. Build your website, application, etc – so that investors know that your plans are achievable.
Our Little Tip – At least have an MVP (Minimum Viable Product) ready when you approach investors, so that they can immediately get the idea.
- Find an Angel Investor – Now is the time for you to look for angel investors. You can find them from our list of most wanted 30 angel investors.
It is generally a rule of thumb to go for investors in your niche/industry but if the idea is revolutionary – the world is your oyster. You can find angel investors on Email, Twitter, and LinkedIn – and send them a direct message with your brief but powerful pitch.
Our Little Tip – You will most likely not get your pitch right in the first place, so you need to follow up with your investor. You need to also be visible by joining various investor groups and attending conferences. You can also join the Indian Angel Network for better exposure and opportunities.
- Project passion and confidence – Once you have the attention of the angel investor, it is now time for you to give a full-fledged presentation of your business idea. The stakes are high, we know – do not worry about the result, just display a passion for your idea. Show facts and figures.
Our Little Tip – Always include your future plans, scalability and revenue during this presentation. It helps the angel investor understand the plan and helps them also plan their funding accordingly.
In the end, always remember, being a founder is a long-term commitment and you need to be persistent in the face of challenges.