From showing a devoted work ethic to presenting your unique product features, here are eight answers to the question, “How did you successfully secure investment from an angel investor in your startup?”
- A Simple Promise
- A Handwritten Note
- A Researched Approach and Strategy
- A Long-Term Commitment and Perseverance
- A Display of Your Expertise
- An Introduction to Your Strong Team
- A Perfect Pitch
- An Understanding of Innovation and Quality
A Simple Promise
A lot of times, angel investors aren’t even investing in the business they’re pitched on; they’re investing in the founders. I understood this, and the first time I pitched an angel for seed financing, I made him a simple promise: I wouldn’t take a salary for the first 24 months. I will work around the clock for no money; that’s how badly I wanted this thing to succeed.
For angels that are skeptical about a founder’s work ethic or the disbursement of funds, making such a promise goes a long way toward showcasing your priorities. In our case, our angel investor appreciated the gesture, but ultimately made me take a salary—even if it was small—so I didn’t have to live like a total pauper. Regardless, simply show that you put your business idea and venture above all personal motives.
John Ross, CEO, Test Prep Insight
A Handwritten Note
I helped a start-up secure an investment by obtaining a mailing list of potential investors and sending them personalized, handwritten notes. This approach enabled them to establish a personal relationship with the investors, which is crucial as many angels invest in companies based on their trust, familiarity, and fondness towards the founders.
It is crucial to be transparent about the type of investment sought, whether it is purely capital or also encompasses other forms of support, such as mentorship or networking.
This clarity enables potential investors to understand the expectations and align their investments accordingly.
A Researched Approach and Strategy
My success story in securing an angel investor for my store began with a thorough research phase. I reached out to friends who had experience and dug through resources online to understand the basics.
My curiosity paid off when I gained an awareness of the steps needed to seek potential investors actively. I took action by networking and attending events, connecting with various individuals that could be or lead me to an angel investor.
I also created an eye-catching and informative presentation about my venture before submitting it to potential investors. My approach and strategy allowed me to gain the attention of one individual and they rewarded my hard work with an investment, leading me toward success with my e-commerce store.
Lorien Strydom, Executive Country Manager, Financer
A Long-Term Commitment and Perseverance
Securing angel investments for my startup was not an easy one. Honestly, I can’t tell you exactly what I did because it wasn’t a straight path you could follow. It took a lot of hard work and dedication to get to where we are today.
First, we identified our target investors and put together a comprehensive pitch deck outlining our business plan and financials. We included everything in terms of numbers, percentages, charts, and graphs to make it as clear as possible for our potential investors to understand.
It took us several months to put together the pitch deck, and we went through many iterations before we felt comfortable showing it to anyone.
The next step was to actually reach out to the investors on our list and work on building relationships. Once we had established a rapport, we could move forward and negotiate a favorable deal and successfully secure their investment. It was a long but rewarding journey.
Shaun Connell, Founder, Writing Tips Institute
A Display of Your Expertise
Most angel investors are self-made millionaires, excited by your ambition to follow in their footsteps. Their first impression of you will be based on their prior understanding of the field and the nature of the project. You must understand every facet of your project, but it is also a good idea to learn as much as possible about the peripheral elements.
Remember, the next time you pitch your idea to an angel investor, they aren’t interested in black and white, but the shades of gray. While these considerations will undoubtedly help you stand out in the eyes of the investor, they will not be the sole determinant.
Many other factors contribute to a successful idea pitch, but staying calm and providing thorough research is essential. All potential investors are aware of the universal need for startup capital.
Andrew Griffith, Owner, Garden Furniture.
An Introduction to Your Strong Team
When we started our health and wellness business, getting funding from angel investors was very hard. However, after working out a few details, we secured some funding, and more followed later.
What really worked for us was presenting our effective, highly skilled, and experienced team that can take our vision and turn it into a concrete business strategy.
Angel investors are not just interested in your innovative ideas and your profit potential; they also want to know that you can implement ideas effectively. This can only happen if you have a strong team behind you.
Logan Nguyen, Co-Founder, MIDSS
A Perfect Pitch
Before I started pitching to angel investors, I spent months perfecting my pitch. I crafted a detailed strategy that focused on the opportunity for growth and investment in my company.
My process included a comprehensive business plan and financial projections. I had to make sure my presentation skills were on point, so I practiced and rehearsed my pitch repeatedly.
Matt Teifke, CEO, Teifke Real Estate
An Understanding of Innovation and Quality
Be sure to showcase your product’s unique features and explain how it stands out from other products in the market as profits follow quality, not margins. Early angel investors are often looking for startups that offer innovative and high-quality products.
For me, it helped to show a deep understanding of the market and the demand for our products. With this, I built a reputation with fellow entrepreneurs that showed our focus on quality and how our business prioritizes superior customer service.
Marc Werner, CEO and Founder, GhostBed