Chapter 6: Angel Fundraising Logistics

Okay, now you know how to identify angel investors, vet, prioritize, and meet with them. There are a lot of questions about logistics that you might still have, such as how to take in the investment, how to track connections, and what’s the best way to email them. This chapter covers all those questions and more.

This chapter is part of How to Find Angel Investors – An Epic, Detailed Guide.
Overview to the Guide – Start Here
Chapter 1: Creating a Realistic Plan and Timeline for Your Angel Fundraising
Chapter 2: Different Kinds of Angel Investors
Chapter 3: Finding Prospective Angel Investors
Chapter 4: Qualifying and Prioritizing Angel Investor Leads
Chapter 5: Connecting with Angel Investors
Chapter 6: Angel Investor Fundraising Logistics
Chapter 7: Most Important Lessons about Getting Angel Investment

6.1 Goals and Timing

As with all fundraising, it’s very unlikely that you’ll raise all the money you need in just a few conversations. How many conversations you’ll need depends on a number of factors such as the size of your raise, the traction that your business has, the strength of your relationships with investors, their average net worth, etc. 

Having said all that, if you are raising $250-500K in angel investment and don’t have a huge network of wealthy friends, you should expect to pitch 50-100 angel investors before you round up all the money you need. If you are raising $50K, you might only need 5-10 conversations. If your target is $1 million, you might need a lot more than even 100 pitches to get you to your goal. 

What does that mean for you? Once again, if you don’t make a realistic plan, you are greatly reducing your chances of success. 

For example, let’s say you are raising $250K and expect that you’ll need 50 pitch conversations to get to fill your angel round. You will need at least 10 weeks to have 50 pitch conversations, if you have 5 pitches per week, or one per day. If you have two pitch conversations per week, it will take you 25 weeks (or more than 6 months) to get to 50. 

If you are super busy running your business, as most founders are, and it’s realistic for you to do only two pitches per week, you need to plan that your fundraise will take at least 6 months. Plus, you have to add another few weeks to do the initial research and outreach. That means that your timeline might expand to 8 months. 

Most importantly, you need to set goals, track your progress, and adjust accordingly. 

If you are planning to do two pitches per week, but a month in you have only had four pitch meetings, you need to re-adjust your timelines, goals, and expectations. You should either be planning on fundraising for a year or reduce how much you are looking to raise. Failing to set goals, track them and adjust your strategy will almost certainly lead to a failed fundraise.

6.2 Angel Investor Tracker

There are many tools that you can use to track your angel investor outreach, and what you should use is up to your preferences alone. Some people swear by customer relationship management (CRM) platforms like HubSpot, while others insist that a simple spreadsheet is ideal. 

6.2.1 Simple Spreadsheet

I would recommend starting with a simple list in a spreadsheet such as Google Sheets, Airtable or Microsoft Excel. 

What has made my life considerably easier in the past is creating two worksheets: one that is just a massive collection of potential investor targets and the other that is the actual tracker of vetted angel investors. Here’s how this could work:

Step 1: Aggregate all potential leads.

As you are doing your initial brainstorming and research, you might want to add everyone that you identify into one worksheet to vet later. In that worksheet, you might also want to have columns for various vetting criteria such as how well you know the individual, their investment focus, how many known investments they have made, etc. Then, as you go through your initial list, you can vet and prioritize your potential investors. 

Tip: It is often a good idea to get help at this step. For example, an intern can competently do a Google search to find out about known investments, etc. 

Step 2: Move top priority angel investor targets to tracker worksheet.

Once you have identified your top 30-50 angel investor targets, you would then move them to the worksheet that you will use for tracking your outreach to them. 

In your tracker outreach, you might have columns such as the following:

  • Name
  • Email
  • LinkedIn Profile
  • Outreach batch (e.g. Batch 1, Batch 2, etc.)
  • Status
  • Relationship to me
  • Potential introducer
  • Notes

The status column should consist of structured values such as:

  • Vetted
  • Contacted
  • Into Accepted
  • Meeting Scheduled
  • Post-Meeting Follow-up
  • Data Room
  • Committed
  • Passed
  • No answer
  • Not a Fit
  • Maybe

At this point, you might do further research to find their email or individuals that could make an intro to each target.

Step 3: Track and update outreach.

As you reach out to your top prospects, it’s imperative that you keep track of your outreach. Doing so consistently will help you use your time efficiently and hold yourself accountable. 

Importantly, you should update the outreach status and notes for each contact. 

6.2.2 CRM Like HubSpot

Some founders prefer to use a sales platform for their investor outreach. That’s also fine. 

The major benefit around using a sales customer relationship management (CRM) is that you can also predict sales by ascribing a value and probability of winning investment for each prospect. 

In addition, CRMs often have features that allow you to share documents and track engagement, which you can use to inform your outreach strategy.

6.2.3 LinkedIn Sales Navigator

Another viable tool for tracking your investor outreach is LinkedIn’s Sales Navigator. I’d be willing to bet that nearly everyone in your target list is on LinkedIn, so why not use LinkedIn to keep track of your outreach to them as well. Having said that, there are some limitations that Sales Navigator has as compared to the other two options mentioned above.

6.2.4 Use What Makes Sense to You

Most importantly, use whatever tool that makes sense to you. Everyone is different, and there is no perfect tool that works for universally well. 

6.3 Email Outreach

The only thing that I will say regarding email, particularly cold email, is to not use an email marketing platform such as HubSpot or MailChimp for investor outreach. This is for two very simple reasons. 

First, most folks have spam and category filters that weed out mass emails. Many folks use GMail, which categorized mass emails as “Updates” and “Promotions.” I know many angel and venture capital investors that never read emails that end up in those two categories, if they don’t get blocked by their spam filters first. 

Second, it greatly devalues you in the eyes of an investor when you demonstrate to them that they are not worth the effort that it takes to write them a personalized email. This is the exact opposite of what you want to convey. 

6.4 Sharing Your Pitch Deck and Documents

It may be tempting to just send your pitch deck as an attachment, but that is not ideal because you can neither track who has looked at it, nor can you update it easily as you create new versions. 

Similarly, for sharing documents such as your incorporation documents or an entire data room, it’s best to do so in a tool that will both allow you to update things easily and track who engages with them.

Tracking engagement is particularly useful, as this insight will let you know on whom to focus. If you see that one investor is spending a lot of time reviewing your pitch deck and data room, you will want to focus your energy on fostering that relationship rather than another investor who looked at your deck for just five seconds.

Try to use platforms such as HubSpot or DocSend that allow you to both update your documents easily and track engagement to share your deck and documents.

6.5 Investment Agreements

If you are not very well versed in different investment instruments or agreements, this can be a very confusing topic and one that far exceeds the scope of this guide. 

However, below are some very high level considerations when it comes to choosing the method of formalizing an investment with a legal agreement.

6.5.1 SAFEs

One of the easiest methods of formalizing an investment is via a Simple Agreement for Future Equity, or SAFE. Originally developed by a leading startup accelerator, Y Combinator, SAFEs have garnered widespread adoption by investors and founders worldwide. 

They are fairly simple documents compared to convertible notes, etc. and don’t usually require legal back-and-forth to modify the terms. 

It is worth noting that angel investors’ attitudes toward SAFEs vary greatly by where they are based and their investment background. In general, the further the angel is away from a major tech hub like Silicon Valley and the more removed from high technology he or she is, the more likely that the investor will not be partial to SAFEs.

Important: For SAFEs and the other modes discussed below, their details are far beyond the scope of this guide, so please consult your lawyer and do your own research to become comfortable with these legal instruments and chose the option that is best for your startup. 

6.5.2 Convertible Notes or Convertible Debt

Another common option used by many angel investors is convertible debt or a convertible note. In essence, this is a loan that converts to equity when certain conditions are met. These agreements tend to be a bit longer and more complex than SAFEs, but there are many parts of the United States, where this is by far the more common instrument–particularly in the middle of the country.

6.5.3 Equity Grants, Warrants, etc.

Other options include priced rounds, equity grants, warrants of some kind, etc. There are too many to list here, but it’s really worth paying a lawyer to help you navigate this part, particularly when exploring less common options.

6.5.4 Crowdfunding

It is common, particularly for founders of very early-stage startups, who don’t have a bunch of rich relatives and friends, that some folks might wish to invest smaller amounts such as $1,000. 

In this case, it might not make sense to use a convertible note or SAFE since the investment is rather small. In addition, future investors might be turned off when they see a dozen $1,000 investments on your capitalization table (cap table). 

A potential work-around is rallying all of your small check angels around a crowdfunding campaign on a platform such as WeFunder or Republic

However, please note that this can be a significant effort, requiring dozens of hours from your team just to get a crowdfunding campaign launched.

6.6 Pitching and Pitch Deck

I’m going to tell you something completely counter to what every startup guru and mentor extols, which is that your pitch doesn’t matter much. It certainly does not matter, in my opinion, as much as finding the ideal-fit angel investor, building a rapport, and running an efficient fundraising campaign. 

If you find an investor that is a perfect fit to whom you roughly articulate your story and business opportunity, they will be far more likely to invest than an investor that is a bad fit, no matter how gorgeous your pitch deck is or how slick your presentation is. 

My advice is to spend the least amount of time on your pitch deck compared to researching, vetting, and reaching out to angel investors.

Next > Chapter 7: Most Important Lessons about Getting Angel Investment


Sergio Paluch - Managing Partner at Beta Boom -- a pre-seed VC fund

About the Author: Sergio is Managing Partner at Beta Boom, a pre-seed and seed fund investing in tenacious founders building startups that positively impact society. His personal mission is to level the playing field for underestimated founders and empower them to build huge, impactful businesses.

Privacy Settings
We use cookies to enhance your experience while using our website. If you are using our Services via a browser you can restrict, block or remove cookies through your web browser settings. We also use content and scripts from third parties that may use tracking technologies. You can selectively provide your consent below to allow such third party embeds. For complete information about the cookies we use, data we collect and how we process them, please check our Privacy Policy