Babson + Beyond
6 Tips to Attract Angel Funding
No magic formula exists for gaining the interest of angel investors. However, you can improve your chances with this advice from entrepreneurship professor Candida Brush.
Illustration: Adam Niklewicz/theispot.com
Stay close. Focus on angel investors who are based near your business. Often, angels prefer local investments because they can visit and work closely with the entrepreneurs in whom they’ve invested.
Follow up after your pitch. Send a thank you and answer outstanding questions. Communicate quickly and clearly. Entrepreneurs who neglect to follow up are less likely to be further considered.
Quit your full-time job. To some angel investors, entrepreneurs who also maintain a job show a lack of commitment, which can discourage potential angels. While the trade-offs of having an income versus working full time on a venture are personal, if you are not ready to commit full time to the venture, you probably are not ready for someone else to invest in your business.
Be open minded. Entrepreneurs who can’t recognize their limitations and accept advice, who act as if they know it all, display a lack of “coachability.” Angels want to lend expertise and help grow a business, so entrepreneurs who appear to refuse this or are unwilling to listen are dumped. Listen to questions and accept constructive suggestions. Keep your ego in check and reflect on how you present yourself.
Don’t be defensive. Entrepreneurs who feel compelled to explain everything are much less likely to make it through the screening process. Take a deep breath and listen before you try to defend yourself or your venture’s strategy.
Be transparent. Entrepreneurs who make things up, inflate their background, stretch sales or cost figures, or outright lie about something will be dropped immediately. If you don’t have an answer, be honest.