October 14, 2012
Contacting angel investors for the first time in your life can be stressful and intimidating if you are unprepared and don’t know what to expect. The more you know about reaching out to angel investors, the more likely you are to get a positive response quickly. In addition to directly contacting individual angel investors and angel investing groups, you need to promote yourself and your ideas as much as possible. Networking and making connections in the business industry can help you establish a good reputation and find investors who might be interested in your project.
If you are a new entrepreneur, there are a few important tips you need to know to get started with networking and contacting angel investors in your area.
1. Perfect your business plan.
Don’t try to approach investors if you are not completely ready to show that your ideas have the potential to develop into a profitable business. Make sure that your business plan has a clear mission statement and that it covers everything investors might want to know about your business model and financial requirements.
2. Work on your elevator pitch.
In a perfect situation, you would have all the time you need to warm up angel investors and present your ideas in detail, but it doesn’t always work out that way. In many situations, entrepreneurs only have a few minutes to convince investors that their ideas are worth a second look. Narrow down your plan to just a few sentences that summarize the most important facts about your business, so you can be prepared to pitch your project at all times.
3. Get a referral or an introduction whenever possible.
All investors, including angel investors, value the opinion of other professionals in their field. They are more likely to invest in opportunities that are recommended by a trusted source, so getting a referral can put you at a big advantage over other new entrepreneurs. If you don’t know anyone who can help you, make sure that you network everywhere you go and always keep your elevator pitch in mind. You never know when you might run into someone who can help you get in touch with local investors.
4. Work on your email pitch.
Angel investors see a steady stream of emails from new entrepreneurs on a daily basis, and your email can easily get lost if you don’t format it correctly. The first thing you need to remember is that the subject line matters, so you should never leave it blank. Make sure that your email is brief but full of relevant information that touches on your ideas as well as the reason why you are contacting that particular investor.
5. Research angel investors before you contact them.
Knowing the background of an angel investor before contacting him can pay off big time because you can tailor your pitch to his needs from the get-go. It’s also a great way to establish a personal connection that sets you apart from other entrepreneurs who didn’t do their homework.