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Once you have found an angel investor that you want to invest in your business, you must approach them in a way that maximizes your chances to gain the investment.
Now that you have the angel’s contact information, consider how you got it to guide your first move. Did you already meet the angel in person at a networking event? In that case, you already have a sense for the way the angel investor wishes to be contacted. Is the angel a referral from someone else you met? Ask the person who referred you for more information on the angel’s preferred communication style. Whether it’s a phone call, e-mail or personal visit, make sure you tailor your first communications to the angel. You will want to provide them with your company’s executive summary as well as any substantial recent updates or successes. Tell the angel you will follow up with them in about a week.
Hopefully the angel investor responds to your initial contact, but if they do not be sure to follow up with a phone call on the schedule you promised. If you have made a follow-up call and still haven’t heard from the angel, try once more to get in touch. Angels are very busy and they may have forgotten to respond. Be careful to not be overly aggressive in trying to get in touch with them if you still haven’t heard back. If the angel was a referral, you can ask the person you got the referral from if they know of an extenuating circumstance prohibiting the angel from having time to get in touch. When you get in touch with the angel, set up a meeting that is convenient for them in terms of both time and location. A good rule of thumb is to ask for 45 minutes of the angel’s time. They can extend or shorten the window if they think necessary.
On the day of the meeting, make sure you know where you are going and where you are going to park. While this seems like novice advice, it is easy to take for granted that you have a normal transportation routine and it could negatively impact the success of your meeting if you are running late and flustered. When you are finally face to face with the angel, resist the urge to dive straight into your presentation. It is worth the time invested to solidify your personal relationship with the angel, so prepare some points to open the conversation with.
Preparing for the Meeting
Investor Presentation: You will want to use a visual aid such as PowerPoint to create a slide deck that you can share with investors to help explain your company. A rule of thumb is to use no more than 10 slides. A 10 slide maximum forces you to edit and revise extensively before you approach angel investors. There are several goals you should have for the content of your slide deck:
Explain what sort of business your company is engaged in
Explain what solution you have come up with to solve a problem customers have
Explain why your solution to this problem is better than other solutions
Explain how you know your business plan
Explain why your management team is the right fit for execution of your solution
If you can, customize your presentation to target the particular interests of the angel. For example, if the angel is most interested in your liability protection, be sure to discuss that detail of your plan thoroughly.
Do NOT include any information that is proprietary or confidential in your presentation. You are not in a good position to protect the information at this point in your relationship with your investors, so it is not worth taking the risk.
Practice Your Presentation: Since it is your business, you know more about it than anyone else. By practicing in front of an audience that will give you helpful feedback, you can understand the parts of your presentation where you trip up or do not adequately explain something.
Mention Money: As you are ultimately looking for an investment from the angel, make sure you mention money. But be tactful with the subject and avoid asking outright for an investment. You can tell the angel how much you are looking to raise in general, and invite them to be an investor.