I wanted to relate my experiences with Angel investors, I know over 100 of them.
In my dealings with them I have noticed one very key factor in raising funds – you have to handle most of them with ‘kid gloves’ and close the investment very fast or you have little chance of getting any money at all.
Angels, as I have stated elsewhere, are aptly named for many reasons – in this case they have wings and come and go without many people seeing them!
If you want to get money from Angels then ensure you do the following:
- Get to meet them personally and give them lots of attention.
- Try and get commitment early and get the funds fast too.
- Don’t have a gap between interest and closing the funding, they go off the boil very fast.
- Do keep in regular touch with good news, especially when trying to close the funding, they like good news to justify their decision.
- Don’t make any changes to your pitch, plans or people if you can – they are very easily spooked and see these as ‘red flags’ even if they are not.
- Do give them access to existing investors who are positive about the business, they like to invest in packs.
- Do get them nice PR pieces and positive testimonials from Customers this helps them feel that you have a future in the market.
- Do control the sale very carefully, don’t let them have direct access to all your people, information, customers, plans etc – they will waste a lot of time with things most of them don’t understand and will find holes anywhere they can.
- Feed them the right information at the right time to ensure a successful close.
- Do justify your valuation and business model with examples of peer companies and exit information so they can see the investment potential in black and white.
I have learned through bitter experience that you will have to meet and manage a great deal of Angels to get the funds you need, many will slip through the net and the whole process is very time consuming.
So do your best not to lose any chances at investment you get by using some of the above tips.
OK, what if that potential Angel changes her mind and says no go?
My advice is to be polite and say thanks for their time and attention and then make a "heart felt" plea for feedback as to why they don’t want to invest.
Why a "heart felt" plea? because we are all lazy and also don’t like delivering bad news so you need to coax them into telling you the reasons why they don’t want to invest – if you can get them to do this you have another chance to get their commitment!
You will be amazed by the reasons people don’t commit, one recently gave me a list of ‘impressions’ they had about one of my businesses! Impressions, they had never bothered to ask me – when I responded to all these ‘wrong’ impressions and put him right he was once again very enthusiastic about investing.
Also, people just go off the boil so easily, asking them for their opinion sparks the relationship back up again and gives you the chance to snatch victory from the jaws of failure.
Again and again I have got customers and investors back on my side by using this valuable process – make sure it’s "heart felt" however or they will probably not respond and the second chance will be lost.
NEVER SAY DIE!