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Angel Investors: How to Find Investors [in 2021] - YouTube
Channel: Raw Startup
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- Today, we're gonna look at
how to find angel investors
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for your business.
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I will give you five specific
strategies to find an angel
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for your startup.
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- [Narrator] This is Raw Startup.
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- I'm the founder of Vivino.
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We are the world's largest
wine app and wine community
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with 50 million users around the world.
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I've raised tens of millions of dollars,
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and a lot of them from angel investors.
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I've raised money from
people like NBA all star,
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Carmelo Anthony.
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We also have Janus Friis,
co-founder of Skype
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as an investor in Vivino.
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Janus actually joined Vivino
at a very early stage,
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where there wasn't much product,
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just like any other angel investor.
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I'll also tell you exactly how
to contact an angel investor
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in 2021 and what to put in
that crucial first message.
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I've done research with
the angel investors,
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to find out exactly what they prefer,
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what kind of message
and how to be contacted.
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First, angel investors
sometimes referred to
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as business angels, are in
almost every city in the world.
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The trick is to find them.
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Generally, the best way to get in touch
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with an angel investor is
through an introduction,
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but you might not have
that network just yet.
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So, I will show you how
to find the people around
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the angel investors, people
that might not invest,
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but they might introduce you
to the people that do invest.
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Okay, before we start,
here are a couple of tips.
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First, use as many of these
strategies as you can.
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They may not all apply,
but several of them will.
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Another tip, with angel
investors, go local,
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only in rare cases go global.
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It means finding someone
locally in your country,
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in your state, preferably, in your city.
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There are some rare cases
where you wanna go global.
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Maybe there is a global
special niche so that there are
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a few angel investors around the world
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that do these types of
investments, but that is rare.
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So, in most cases, go local.
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Another key thing to understand here,
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is that angels don't fly alone,
they work with each other.
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They invest together.
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They learn from each other and introduce
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other potential investments to each other.
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So, the key here, break
in through that wall
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of angel investors and you'll have access
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to a lot of investors.
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Now, let's take a look at the strategies.
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Number one, use online platforms.
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I'm sorry to have to disappoint you here,
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these platforms are not as
good as you would think.
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I will show you a few,
they're not amazing,
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but worth trying.
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There are two main features here.
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One of them is to look
for angel investors,
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the other one is for angel
investors to find you.
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There's one platform where
angel investors can find you,
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and they have another two platforms
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where you can search
for an angel investor.
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Okay, let's start with the grandmother
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of all angel databases, AngelList.
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10 years ago, there were
an amazing platform,
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now, they've changed focus,
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I'd say it's still worth
getting listed there.
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They're so focused on investors
and people looking for jobs,
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that's actually hard to get listed there.
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To find out how to get listed,
please look at this page.
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It will take you through step-by-step.
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The link is in the description.
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Cool, now you're listed,
let's hope someone reaches out
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and wants to invest, fingers crossed.
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Now, let's have a look
at the angel databases.
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I found two that I found useful and free.
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First, Investor Hunt.
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40,000 investors, which is okay.
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There's a decent chance you'll
find someone you can use.
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Everything is structured in tax
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and I find it a little bit hard to search,
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but try it out, I think it's worth it.
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The other one is Twine's
mega list of investors.
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There's a link in the description.
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It's quite a big list,
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you have to register with your email,
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but I think it's worth checking out.
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Finally, on these lists and databases,
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please let me know if you
know any useful and free ones.
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I really had a hard time
finding any amazing database
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and list.
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So, if you know any that
I haven't heard about,
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put them into comments, please.
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Number two, find local groups of angels.
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Basically, every single
country and most bigger cities
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have angel groups.
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You just gotta find them.
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These groups really shouldn't
be that hard to find.
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Just Google angel investor
and your city name,
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or business angel and your city name.
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For instance, in Denmark,
there's a group called
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Danish Business Angel and
there is a Nordic group called
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Nordic Makers.
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There are likely hundreds,
maybe even thousands
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of these groups around the world.
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They're also all over in the US
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and US certainly has hundreds of them.
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Sometimes they're
connected to a university.
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As an example, there's Indiana
University Angel Network.
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These angel investors
learned from each other,
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pass deals to each other
and also pool money together
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to be able to make bigger deals.
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If you can't find in local angel groups,
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just ask any angel investor,
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they will know the local angel groups.
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So, find them, get in touch with them,
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they like getting inbounds,
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they sometimes have pitch nights
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where you come on a Thursday
night and pitch them all.
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It can be a lot of fun.
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These pitch nights can
be really good practice
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before you go on and pitch
to venture capitalists.
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Number three, go to local
startup events and meetups.
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Most cities have some
sort of startup community
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that do events and meetups.
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These events can be a great
way to meet an angel investors,
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they very often hang out at these events.
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This is all about meeting
as many people as possible
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and telling them that you're
looking for an angel investor.
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Personally, this is not
something I've used a lot,
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some people like it, some people don't,
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we all have different preferences.
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So, ask around and see
what events are out there.
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Also, try and search on Meetup
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to see if they have any
startup events near you.
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A quick look up on Meetup
and you can see they have
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10,000 startup groups.
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One of them must be near you.
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So, go to the event, tell your story,
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tell them what you're trying to build,
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and it can be any kind of startup event.
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It's all about getting the word out there.
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Number four, tell everyone,
here's an important point.
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There are quite a lot of angels out there
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that only do a few investments a year
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and they're listed nowhere.
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They can not be found,
but they can find you.
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These angel investors
are often professionals,
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you know, doctors and lawyers,
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they made a bit of extra money
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and wanna have some fun with it.
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The only way they will find
you, is if you tell everyone.
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Use whatever social
media presence you have,
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tell everyone there and
use any other location
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to tell your story.
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You may think you don't know
anybody that would invest,
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and you might be right,
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but you don't know who
the people you know know.
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If you go on one more level,
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you suddenly know a lot of people.
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Somebody always knows somebody.
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So, make sure you have an incredible story
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and tell everyone.
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When you tell everyone,
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make sure you have a
fantastic elevator pitch.
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You have to tell a story
that everyone understands,
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otherwise, they can't repeat it.
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So, keep it simple keep it understandable,
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it's really hard to repeat a
story you don't understand.
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And finally, what I consider the best way
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to find an angel investor.
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Number five, search on LinkedIn.
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Yes, there are a lot of
angel investors on LinkedIn.
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I went three levels out and
found 106,000 angel investors.
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There's just a lot of
them out there, thank God.
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That's even the people that
put it in their LinkedIn.
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There's a lot of people that
don't put angel investor
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on their profile because they
just get too much inbound.
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With LinkedIn you can find angel investors
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almost everywhere.
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Let me show you.
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Des Moines, Iowa, has 20 angel investors.
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Louisville, Kentucky, I
found 46 angel investors.
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Tucson, Arizona, I found
60 angel investors.
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Bismarck, North Dakota,
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(Heini clicking)
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sorry, Bismarck, zero.
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Yes, the angel investors
are almost everywhere.
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And if there's a university in the city,
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it's even more likely.
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Yes, LinkedIn probably is the best way
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to find an angel investor.
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But be very careful and
selective on who you contact.
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You can never, ever spam
these guys, no spam, ever.
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If you find someone very irrelevant,
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the best way is always
to get an introduction.
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But if you can't get that,
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you have to contact them directly.
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So, when you send them a
message, be short and relevant.
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Tell them exactly why they are the right
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angel investor for you and
what you're trying to build.
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No mass mails, no spam,
ever, they will not work.
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We'll get right back to what
you need to put in the message
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in a second.
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Okay, make sure you use as
many of these strategies
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as possible, and you'll
probably find an angel investor.
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Okay, now we have the strategies in place
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on how to find them.
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Let's have a look at how we contact them
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and what we put into that
first, crucial, crucial message.
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I've spoken to angel
investors that get 10,
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maybe even 20 messages a day.
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Now, that's a lot of messages
from hopeful founders.
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In those cases, it can be
really, really, difficult
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to get the attention
from the angel investors.
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It is crucial that we
send the right message
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and use the right channel
to send that message.
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The best way, the most certain way
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to get totally disqualified,
is by sending a long message.
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It will not be read, it will be ignored.
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So, be short, be precise and be relevant.
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I actually went out there and
asked the angel investors,
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how they want this to happen.
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Let's dig into that research.
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So, I put them into three groups.
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The best way, the okay way, and finally,
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the worst way to contact
an angel investor.
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Let's start at the bottom.
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What's the worst way to
contact an angel investor?
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Well, it's a Facebook
message, it's a text message
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and the phone call.
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Do not use these methods unless it's
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absolutely the only way you can do it.
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Most angels find this method
a little bit too private,
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a little bit too intrusive, especially,
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the Facebook message was a no-go.
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The angels very agree on
that, 80% of them said,
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no, thank you to a Facebook message.
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Okay, the second group
is the okay way to do it.
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Use this, but in a
careful and selective way.
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In this group, we have
emails and LinkedIn messages.
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Most angels are okay
with people reaching out
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on those channels.
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Okay, so, what are the best ways
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to contact an angel investor?
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Well, no real surprises there.
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It's to bump into somebody
at a conference or event.
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My impression is that
the angels like this,
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because it takes a little bit of courage
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to walk up to somebody and
do a quick elevator pitch
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at a conference.
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As always, the other one in the best way,
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is an introduction.
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There's no doubt that is
the best way to do it,
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but it can be hard to get an introduction.
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So, start at the top of the
list and work your way down
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and try and avoid the worst ones,
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unless there's no other option.
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Also, don't use more than two ways
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to get in touch with
the same angel investor.
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They can get really, really annoyed,
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if they get five messages
on five different platforms.
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Now, we know how to contact them.
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Let's see what we put
in that first message
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to really grab their attention.
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The signals from the angel investors,
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are not as clear as before,
they disagree a little bit
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on what is most important.
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So, I will just rank them
from what's least important
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to what's most important in the message.
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Let's start at the bottom of the list.
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Traction, not because it's not important,
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but rather because you
don't have much traction.
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If you had a mass amount of traction,
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you might not need an
angel investor at all.
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So, traction is less
important in the early stages,
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because probably so small, anyway.
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The market, usually a box,
it just needs to be checked.
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You need to know enough about the market,
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but it really isn't an attention grabber
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in the first message, as there's
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plenty of great markets out there,
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but breaking into them is the hard part.
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Then we have the idea,
keep this part short
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and something that could lead into
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what really matters and
that's what comes in the first
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and second position here.
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The product, the product is key here.
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Tell the angel investors
what the product is,
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what the problem is and how you solve it.
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Keep it short and precise.
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Finally, there is the team,
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and tell the angel why
this particular team,
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is uniquely positioned to
solve exactly this problem.
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At this stage, there is little product,
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there's not much traction, it
all comes down to the team.
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So, the team is key to this pitch.
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My overall recommendation
here is to spend most time
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on the product.
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What's the problem, how do
you solve it on the team?
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How is the team uniquely positioned
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to solve this particular problem?
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When you get a little bit further
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and ready to build a full pitch,
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make sure you check my video,
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How to Build an Investor Pitch.
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Finally, I got some tips
from the angel investors
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and here are some of them, be
sure, be precise, be relevant.
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Try and find an angel that would invest
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in the area you're in.
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And they keep repeating,
try and get an introduction.
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Find someone in their network
and get the introduction.
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It will increase the odds radically.
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Also, try and build your network
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without thinking about investment.
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Network with people
around the angel community
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and you'll get there, you'll
get that introduction.
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Building those relationships
really pays off
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in the long-term.
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If you want more content just like this,
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please consider pressing
like and subscribe,
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and I'll see you in the next video.
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Thank you very much for watching.
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(upbeat music)
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