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