Recently I’ve been receiving a lot of emails from entrepreneurs asking for advice. I’ve learned a lot over the last few years and it’s always fun to try and apply the lessons I have learned to another situation. Although I feel unqualified to be giving out advice, I’m always willing to share and help where I can. One particular question that has come up a lot recently is how to find angel investors. I’m hoping to save some time and hopefully be helpful to more people by posting my thoughts here.
Let me start by acknowledging that I know we were really lucky. TechStars helped us get connections and investors that would have been tough to get otherwise. The short answer on how to find angel investors is apply for TechStars. I’ve written before about how valuable TechStars was for both our company and for me personally. Applications for the Boulder program are open until March 22. If you have the chance and the desire to start a company, TechStars is the way to go. I can’t recommend it enough.
If for some reason you can’t get into TechStars, don’t despair. A little tenacity can get you a long way.
Start by identifying the best people you could possibly have as investors. These people are easy to spot — they’re the guys with tons of industry experience, plenty of connections and mountains of cash. Your first task is to find them, your second is to engage them. The non-obvious part is that you should focus on finding good mentors first. The money will come later. As the saying goes, “if you want money, ask for advice. If you want advice, ask for money”. I’ve definitely found that to be true. First, identify the people you want to engage and then see if you can get to them via your network using LinkedIn. It’s best if you can get an introduction, but even cold emails can work surprisingly well when they’re personal and well-crafted.
After you’ve found mentors and gotten them engaged in your idea, the best trick for converting them to investors is to implement as many of their suggestions as you can. This is important because it helps them start to feel ownership in what you’re doing and they’ll want to give you money to see their ideas succeed.
Approach investors as you would a girl you want to date. Specifically, this is one of those situations where it’s wise to be indirect with your approach. Don’t go in for the kiss right away. Build the relationship first. When the time comes to bring up money, it will happen naturally.
Raising money is hard, but don’t get discouraged. Take every “no” you get as an opportunity to learn something and refine your idea. If you can’t get someone to say “yes”, figure out what you need to change or just go out and prove them wrong!
Hope that helps. Good luck!