After several months of hard work, as an entrepreneur, your business needs cash to take the next step or to accelerate its growth. Even if fundraising is more publicized than good commercial successes, we must not forget that the best resources is what you get from your customers and not that of the investors. You must therefore have valid reasons to open your business to investors.
Your business is still in its early stages, so it is still too early to seek capital from investment funds. You are therefore going to look for private investors, ready to walk this journey with you, and who will risk part of their money in exchange for your company shares.
How to get in touch with an angel investor?
There are different ways to identify potential investors. This can be through events around the theme of entrepreneurship, startups meetings or forums, on social networks (in particular via LinkedIn or on the app Shapr), and especially through your own network (someone who knows someone, etc). Do not hesitate to exploit your network. If you contact an investor on the recommendation of another person, you are more likely to get their attention.
Now that you know an angel investor, get their email address to contact them. Do not write to him via social media messaging (except to ask for his email address) to offer him an investment opportunity. These messaging services are not suited to regular exchanges and do not offer an efficient system for organizing messages. Do not contact him by phone either. You cannot study a file directly. Prepare to write him an email.
The selection process for an angel investor
With a strong entrepreneurial activity, an angel investor receives a significant amount of files every week, well beyond his investment capacity. It is therefore not surprising that he responds negatively in almost 99% of cases. The reason why you must be original and impactful.
To be able to attract his attention, your communication will have to include 2 elements:
- A short email introducing your project
- A detailed presentation (what we call the pitch deck)
A clear and persuasive email
Faced with a large number of requests, an angel investor must be able to read your email in less than five minutes and be able to understand macroscopically what your startup project consists of.
The five elements to include:
- What problem do you want to solve and what market does it represent?
- How does your solution differentiate from other existing solutions?
- What makes the strength of your founding team? (its expertise, its added value)
- What is the main achievement that demonstrates your Product Market Fit, that is to say, that demonstrates that your product responds well to market demand?
- It could be the growing number of buyers month after month, your increasing business volume, strong recurrence, etc. Do not include a lot of numbers. Instead, identify the right metric that reveals the quality of your success to date.
- The amount you are looking for and the minimum ticket.
- Indicating the minimum ticket will allow you not to waste time with an angel investor who would be interested in the project, but who would not have the means to invest.
Take care to write a short, airy email that is easy to read and which only includes the essential and differentiating elements.
The objective of this short message is to arouse the interest of an angel investor to study your project in more detail, thanks to your pitch deck.
A complete pitch deck
In a PDF document, in the format ” slide », you will detail all aspects of your project. This presentation must be complete, clear and understandable by someone who is not necessarily from the same sector of activity as the project in question.
Be careful not to overload each slide with information. Prefer several slides, with a specific message for each, rather than cluttering up a page with a lot of different elements.
Your presentation should not exceed thirty slides and cover all the facets of your project: market, positioning of your solution, business model, current track-record, growth strategy, team, use of fundraising, etc.
The next step: get an appointment
As a conclusion to your email, leave your contact details (email and telephone) so that the angel investor can contact you again to arrange an appointment if your file interests him. If so, they will want to meet with you in person to find out more and ask additional questions in relation to the information provided in your pitch deck. Also, specify that you are open to all constructive feedback (positive or negative) and that he can transfer your fundraising request to any other angel investor in his network who may be potentially interested.
If after a week you have not received a response, send it back with a very short message. The person may well have forgotten your message, not finished studying your file, or simply not interested. This single raise will be the last to send. If the angel investor still doesn’t answer you, consider that he is not interested, and waste no more time trying to convince him.
Mistakes to avoid:
- Do not pretend that one can benefit from particular advantages (a lower entry ticket, or other more advantageous conditions). To sell off your project is not rewarding.
- Don’t adopt an attitude that you seem to be begging for money because your business is in dire need of cash in the short run.
- Do not enter the desired response date that is too short to pressurize the investor.
- Don’t relaunch it constantly.
You must contact an angel investor by sending him an email that he can read in less than five minutes and which will illustrate how your project solves a problem and what have been your most exceptional achievements to date. As an attachment, you will attach your complete pitch deck so that he can read all the information if he is curious about your project. Finish leaving your contact details so that he can arrange an appointment if your project interests him.
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