Angel investors are typically high net worth individuals who invest very early into the formation of a new startup company, usually in exchange for convertible debt or equity. The role of angel investors serves as a critical bridge between the startup financing needs of a company and their larger capital needs later on.
Angel investors tend to invest in companies that are in industries they know a lot about. So, for example, if an angel investor made a lot of money in the real estate industry, you can imagine they would be most comfortable putting money back into that industry. After all, they know the industry, including the right questions to ask, what kinds of opportunities exist — and who’s BSing them. That’s not to say that it’s the only criteria for angel investors. They may have made their money in gold mining, but are looking to make investments in tech companies because they think that’s where the big upside opportunity is.
Recent years have also seen a mini explosion of online platforms for angel investors. Angel Capital Association is one, with more than 13,000 accredited angel investors. Each site is going to have its own requirements and expectations for connecting with angels, however, so pay attention to the rules and processes outlined on their sites.
It’s not that hard to figure out how to pitch angel investors properly. Most of it comes down to common sense and just treating angel investors the way you would want to be treated. Despite what you may think, if you want to pitch angel investors you’re not expected to go through some elaborate sales routine. It’s a matter of presenting great information in a compelling way, but doing so honestly and with compassion.
The first thing you’re going to send to angel investors is your elevator pitch. Your elevator pitch isn’t a sales pitch. It’s a short, well-crafted explanation of the problem you solve, how you solve it, and how big of a market there is for that solution.
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