Funding 101: Prep


Find Angel Investors

If you want to find angel investors that make sense for your deal, the best way to start is to search by the proper criteria.  Angel investors, much like venture capital firms, like to find startup and early stage opportunities that existing within areas they are most comfortable making investments.

The more time you spend to help find angel investors that are very well targeted, the more likely you’ll be to get a good response rate.  

All Angel Investors are NOT the same!

Angel investors come in lots of flavors.  Some are focused on really early stage opportunities when the company is just an idea on the back of a napkin.  Others are looking for companies that already have some market traction and have already proven they are on a hot streak.  You’ll want to make sure you do as much of your homework as possible to find angel investors that write checks for exactly what you do. 

Find Angel Investors by Industry

The first place to start is by filtering through the industry or market you currently serve.  Generally speaking, angel investors follow particular industries as their first filter.  That means if you are looking to find angel investors for a real estate deal, you’re best bet is to filter out those who have no interest in that market.  You’d be wasting your time trying to pitch angel investors on an industry they don’t serve.

We like to use “industry” as the first filter, realizing that a particular industry can have lots of “markets” within it. For example, “technology” is a commonly addressed industry among angel investors however there are dozens of individual markets including software, Internet, hardware, and others.  Even within those markets they can sub-divide more.

The more specific you can make your search to find angel investors that are a clear fit for your deal the better.  Using our search, start filtering by industry and then worry about the rest of the filters later.

Find Angel Investors Near You

After you’ve narrowed your search to find investors by industry, you’ll then want to sort the list by those who are closest to you.  You can do this easily by typing in your zip code which will scan the angel investor network for those investors who are in your area.

You’re certainly not limited to talking to local angel investors, but they will most likely be your most likely candidates for capital.  Angel investors certainly write checks to companies outside of their region, but it’s less common.  They tend to source deals that are close to them where they can meet with the entrepreneur as needed by just hopping in their car.

Some angel investors will have specific local criteria to let you know that they do not invest outside of a particular area.  In that case it’s best to spend a little bit of time on their online profile to get a sense for how they work.  Your time is as valuable as theirs, so there’s no point in reaching out to people that don’t invest in your area, and chances are you’re not going to relocate to meet their funding criteria (that’s rarely a good idea).

Find by Funding Amount (Deal Size)

Not every angel investor funds the same size of deals.  Some may invest very early on, but only invest up to $25,000 with a single check.  This is most common of individual angel investors who are investing personal capital in a very small number of deals. 

As you start to move up the chain of angel investors, particularly when you get to pools of capital committed by an angel investor group, you’ll find those that invest up to $2 million of capital, although that tends to be on the very high end.  After $2 million you tend to be in the range of what venture capital firms invest, which is a totally different class of investor.

Dig into their Portfolios

Angel investors don’t typically publish the range in which they invest the way venture capital companies do, so it may be difficult to assess whether the angel investor you’re about to reach out to makes sense for you.  In that case it may be possible to do a little research on the portfolio investments they have made to see if they have previously written checks for deals like yours.

Each investment the angel investor has made tells you a lot about their investing preferences not on just funding size, but also on the markets they get excited about.  The best thing you can do is reach out to an angel investor with a little inside knowledge and say “I see that you’ve invested in Widget Worx, Inc. - we have an opportunity that serves a similar market that we think you might like.”  The more relevant you are, the better off you’ll be.

Rank Angel Investor Search Results

The final step once you’ve found angel investors that fit your criteria is to figure out how to rank your results.  You’ll want to start by contacting your most relevant matches first.  And most importantly, you’ll want to take your time in reaching out to them so that you can get some feedback from one before you reach out to another.

We’ve written an entire section on everything from pitching angel investors to the entire angel funding process, so we’d recommend you read that before contacting anyone.  But for the time being as you’re doing your angel investor research, you’re best off starting with those that are as close to a fit as possible.

Find Angel Investors by Industry & Location

find angel investors