Chapter 5: Connecting with Angel Investors

After you have qualified your angel investor leads and prioritized those with the highest likelihood of investing, it’s time to reach out to them. 

This is usually the part where founders get most intimidated and confused about what to do. Fear not, however! I’ve got some actionable and effective tactics that will demystify the process and hopefully get you some meaningful meetings.

5.1 Connecting with Potential Angels that You Know

Usually, the most likely people to invest in your company are those that you know. Not everyone has a ton of friends and family that can write a check, but almost everyone has at least a handful of folks that could be their angel investor.

How do you know if you know them well enough? If they wouldn’t think it’s totally weird to get a text from you inviting them to coffee, lunch, or a drink, then you know them well enough.

5.1.1 Demo Dinner with Your Friends and Family Angels

One of the most effective tactics to bring your friends and family together to hear about what you’re building is to simply invite them to dinner. However, it’s critically important that you don’t ambush them. Instead, be very direct. 

Reach out to your friends via text message, social media, or email and let them know what you are working on and that you’re hosting a dinner for your friends to show them your product or startup and to ask them to consider investing or help you identify angel investors in their network. An email might look something like this:

I know, you’re really putting yourself out there, but your family and friends want to see you succeed. They almost certainly won’t be affronted, and they will politely decline if they are not comfortable joining. At worst, they will probably say something like, “Ali – I really, really love what you’re building, but I’m not comfortable investing right now. I will ask around to see if any of my friends might be interested. In any case, I’m so proud of you!”

By the way, you can write a similar email to your Aunty too!

Tip: These kinds of dinners work best when you bring circles of friends together. So perhaps you can do one dinner for your college friends and another for your work friends and colleagues.

In terms of how the dinner should go, just be yourself. After you eat, you might show everyone your platform, app, or product. Tell them a bit about why you are passionate about it, how things are going, and what’s next. If some of your friends or family members are interested, they will let you know with the questions they are asking and their body language. 

5.1.2 Demo Coffee or Lunch

Perhaps one of your friends can’t make the dinner, or you just feel more comfortable talking to them one-on-one. Invite them to coffee, lunch, dinner, drinks to show them what you’re working on. 

Once again, don’t ambush them, but perhaps take a little bit of a less direct approach in one-on-one situations, so your friends or family members don’t feel cornered. I find it’s best to ask friends to catch up and tell them about what you’re working on. A text message thread might go something like this:

The tone of your invitation will depend on your relationship with the person with whom you’re connecting. 

For example, if you want to invite your dentist to coffee, you might write something more along these lines:

Although the above is not quite as direct as the email above, Dr. Root won’t be caught by surprise when you start talking about your startup over coffee and dropping hints about angel investment.

How do you spring the question? Well, it varies based on how comfortable you feel with the person sitting across from you. With Kat you might just ask outright, “So Kat, do you think you might want to invest?”

With Dr. Root you might judge his reaction and body language. If he’s totally uncomfortable and shifting around in his seat like he’s about to go through a root canal (pun totally intended), then you might just ask him if he can think of anyone that might be interested in an angel investment. If Dr. Root is asking a ton of questions and his face is lit up, you might go for it and ask, “Would you be interested in investing in my startup, Dr. Root?”

5.2 Connecting with Angels that You Don’t Know Well

When you don’t know investors, asking them to a group dinner or coffee probably won’t work well. However, there are a few tactics that can help to both get you on their radar and build rapport, so you can get a meeting with them in the future.

5.2.1 Ask Portfolio Founders to Introduce You

The best tactic, by a very long margin, is to get founders in whom the angel has invested to introduce you and vouch for you. Investors trust their portfolio founders more than even other investors. This is gold and totally worth the effort to make such an introduction happen.

Step 1: Identify portfolio companies.

The first thing that you’ll need to do is identify companies in whom the angel investor has invested. In some cases, this can be easily researched online. For example, many angels list their investments on online platforms such as Crunchbase, or they will list their investment in their LinkedIn profile. 

If they are a local angel, you can always ask around and find out what companies the angel has invested in. For example, you can ask other founders in a co-working space or business leaders that you know or have a connection to. 

Take note of each company you identify. If you are keeping track of angel investors in a spreadsheet, you might want to create a new worksheet for listing just portfolio companies and founders for each angel.

Step 2: Identify portfolio founders.

Once you find out which companies the angel has invested in, the next step is to figure out who where the founders of those companies. Once again, a little Google, LinkedIn or Crunchbase research usually does the trick. Again, note down the founders for each angel investor that you are trying to reach.

Step 3: Reach out to the portfolio founder.

The trick is not to ask the founders for an introduction to angel investors right away. It’s very intimidating to put one’s reputation on the line by making an introduction to a founder that you know next to nothing about. 

Rather, connect with the angel’s portfolio founder by asking for advice on fundraising from angel investors or a specific business challenge that you have. Here is an example of an email that you might write:

How you reach out to founders is less important than the context. You can reach out via social media, LinkedIn, or email. 

If you reach out via direct messages, you will obviously need to make the above message shorter. For example:

Don’t be afraid to follow-up a few times (3-4 follow-ups is normal). Founders are swamped with emails, messages, and meetings, and might not respond right away even if they want to help.

Step 4: Ask, show, tell, and ask.

Once you are able to connect with the founder, make sure to first establish rapport by asking about their journey. “How did you know you had to build your startup?” is a great way to kick off a conversation. Then you should share your journey. What led you on this adventure? Why are you so passionate about what you are building?

If you have time, a quick demo is always a great way to solidify your vision in the other person’s mind. But make sure to prepare and manage your time, so you can get to the ask, if appropriate. 

Again, the trick is to judge the founder’s reaction to what you are doing. If there are showing excitement on their face and are asking good questions, they are likely into what you are building and will make a good introduction to their angel investor or investors.

If you can tell that they are interested in your startup, you might ask them something like, “I noticed that [insert name] is an angel investor in your company. Would you feel comfortable introducing me to her?”

The worst thing that could happen is that they politely decline. However, they are almost certainly going to be supportive either way. Remember that they were in your shoes once, and they know how challenging it is as a founder of an early-stage startup.

Step 5: Send a blurb, and follow-up.

The best thing that you can do to make sure that the founder introduces you to their angel investor is make it super easy for them. 

Most importantly, send them a short 3-4 sentence blurb about your startup. Make sure to include a one-sentence each of the following:

• What your startup is about;
• What problem you are solving and how your solution is unique; and
• The momentum that you have built up.

Make sure to illustrate with numbers! Below is an example that you can use for inspiration:

Also make sure to include your pitch deck, preferably in the form of a link pointing to it. Docsend and HubSpot are very good options for sharing your deck via a link.

Finally, feel free to follow up at least 3 times. As I mentioned above, founders are busy, and even though they really might want to make the introduction, they are getting pulled in a hundred directions every day and might forget.

5.2.2 Ask a Champion to Organize a Pitch Dinner

Even if you don’t have investors yet, most founders have champions–those individuals who admire what you are building and are willing to actively help and support you. Often, your champions are your investors, but they could also be your mentors, former bosses, college friends, an ex-professor, a local business person or celebrity, etc.

Chances are good that your champion has folks in her or his network that could make an angel investment in your company, particularly if they are well known and respected in your local business community. 

If that’s the case, ask your champion or champions to organize a pitch dinner for their friends and acquaintances. Here’s how this might work:

Step 1: Your champion sends an introduction and Invitation.

Your champion sends out an email to her business associates, friends, and acquaintances to introduce you and your business and to invite them to a dinner she is organizing, so they can hear your story first-hand and get to know you.

It can be very helpful for your champion to leverage a description or blurb that you provide to her and that she can put in her email:

Step 2: Tell your story at the dinner.

The most important thing that you can do as a founder is tell your authentic story, since a lot of angel investors back people rather than business metrics. 

Remember to include how you became so passionate about the problem you’re solving and why your approach is so uniquely valuable. You can also mention high-level traction and milestones, but be careful not to sound too transactional.

End by mentioning that you would love to connect with those that might be interested in making an investment or can help you on your journey by opening up their network.

Important: You should not be pitching an opportunity to invest in your startup to folks that you don’t know very well without verifying that they are accredited investors. (See above for criteria.) You need to verify their accredited investor status before you mention details about the investment opportunity. See the next step.

Step 3: Connect with those folks that might want to invest or can offer support.

You next need to write down or connect with those folks that want to learn more about your startup. The best way to do this is with a good ol’ fashioned sign up sheet, where folks can write their name, email, phone number, and accredited investor status. 

For their accredited investor status, make sure to give them an option to specify as “not sure.” You should also be fluent with the criteria yourself, so you can provide direction.

If you are not sure about whether someone should be considered as an accredited investor, play it safe and put them on a back burner for now, or ask your lawyer. 

Step 4: Meet with each potential investor individually.

Now that you have the contact information for those that want to be involved in your startup, set up one-on-one meetings with them where you continue the conversation. 

Once again, make sure they are accredited investors before discussing the terms of your angel round. 

Assuming they are, you can ask them directly, “Would you be interested in making an angel investment in our company?”

Step 5: Follow up.

You will likely need to follow up with the individual to send them additional information about your business such as a pitch deck, financial projections, or the investment instrument that you’d like to use such as a Simple Agreement for Future Equity (SAFE) or a convertible note. (More on that later.)

Also, most folks that are in a position to invest will likely also be very busy, so don’t be afraid to follow up two to three times to help move things along.

5.2.3 Ask the Angel Investor a Specific Question

If all else fails, it is possible, although a lot less likely, to connect with an angel investor via cold outreach. However, blasting angel investors without targeting, personalization, or finesse will almost certainly lead to failure. 

In the experience of those that have had success with cold outreach, they will often mention that the most effective way to get a response is to personalize your outreach. 

It’s not uncommon for angel investors to get dozens or even hundreds of cold outreaches per month via social channels and email. They often don’t have enough time to respond to them all and even less time to meet with all the founders that reach out to them. Remember, these are often successful people whose attention is in great demand. 

One of the best ways to stand out from the massive crowd of founders competing for their attention is to demonstrate to angel investors that you have invested time into knowing them, so they might return the favor and invest their precious time to get to know you too. Here’s how:

Step 1: Understand their background, interests, and investment preferences.

Do a little Google searching, check out their social media profiles, and ask around. What kind of work experience does the angel investor have? What are some areas of innovation and business that she is interested in? Which startups has the angel invested in?

Step 2: Identify a topic that the angel might be able to help you with.

Let’s say that you run a digital health startup and your target angel is an emergency room doctor, John. In your research, you find that the angel has built and sold a company in the mental health space, and his passion is understanding patients and their needs. You also learn that he has invested in four other digital health and wellness companies in the past. 

Below is an example of what a cold email to this angel investor might read like:

Step 3: Nurture your relationship with the angel investor.

Unless the angel asks to invest on their own accord, it’s exceedingly unlikely that an angel investor that doesn’t know you well will make an investment in the first meeting. 

In the majority of cases, you will need to build their trust and confidence over time by sending them updates to demonstrate your momentum and ability to execute, relevant industry news to show them your in-depth knowledge of your space, etc.

Over time, however, as you demonstrate your passion, execution, and domain expertise, the angel investor might become comfortable investing in you and your team. For example, if after a 4-5 touchpoints, you see that the individual is engaged and is liking and commenting on your social media posts and replying to your email updates, it might be time to ask for another meeting to formally pitch the opportunity to invest in your company.

Next > Chapter 6: Angel Investor Fundraising Logistics

About the Author: Sergio is a Managing Partner at Beta Boom—a pre-seed and seed fund investing in founders who do not fit the Silicon Valley mold.

His mission is to level the playing field for underestimated founders and empower them to build huge, impactful businesses.