What is an angel investor? How do they invest? What's the difference between an angel investor and a venture capitalist? This presentation answers all these questions, and also includes tips from actual angel investors on what you can do to impress an angel.

1. How to Make It Into
“Startup Heaven”
IMPRESS
THE
ANGELS

2. WHAT IS AN ANGEL INVESTOR?

3. A high net worth individual who invests their
own money into startup companies in the
hopes of gaining a return on their money.
Many angels are entrepreneurs themselves,
or executives and business or community
leaders.
Wikipedia defines an angel investor as:
“an affluent individual who provides capital for a business start-
up, usually in exchange for convertible debt or ownership equity.”

4. HOW DO
ANGELS
INVEST?

5. Angel investors can invest individually,
or as part of an angel investor group.
The type of deals and industries they
invest in, company stages, as well as
what amounts they invest, depends on
the individual or angel group.

6. Angels come in all shapes
and sizes—from newbies to
seasoned investors—and they
invest anywhere from very
small increments of $5000 up
to much larger amounts, like
$1-2 million dollars per deal.
$5,000
$2,000,000

7. If you’re lucky, and a angel (investor or
group) is piqued by your initial short
pitch, they will want to schedule more
time with you getting to know you, your
team, and dig deeper into your
business plan.

8. Source: Tech Cocktail: http://tech.co/angel-investing-series-part-ii-2011-08
THE DUE DILIGENCE PROCESS:
Business plan
review
Management
presentation
Site visit(s)
References
Competitive
analysis
Financial
analysis
The Deal

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10. Source: Tech Cocktail: http://tech.co/angel-investing-series-part-ii-2011-08
THE DUE DILIGENCE CHECKLIST:
Due Diligence
Checklist Table
Best Practice
Guide
Source: Angel Capital Education Foundation
CLICK HERECLICK HERE

11. ANGEL
INVESTORS
VENTURE
CAPITALISTS
VS.

12. “Angels generally invest their own money in
start-ups and very early stage companies,
while Venture Capitalists mostly provide capital
they have raised from others to later-stage
businesses for growth.”
— Angel Capital Association

13. Depending on the venture capitalists, they may want
to own the majority of your company (i.e. 51%).
This will definitely change the dynamic of your
company, so it’s important to conduct thorough due
diligence on any investors who are interested in
investing capital into your company.

14. Always look at the portfolio of investments the firm
has made, and contact the CEOs and Founders of
those companies to find out what it’s like having
them part of their company.
Ask them—point blank—would they take their money
if they could do it all over again?
And what have been the pros and cons of taking
venture capital?

15. WHAT IMPRESSES
ANGEL INVESTORS?
LET’S ASK THEM…

16. “I am impressed when the entrepreneur talks to me
about solving a specific customer’s problem. If he/
she really knows what the customer wants and is
willing to pay for, I sit up and take notice.”
— Dan Whitaker
Angel from Corvallis, OR
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17. “Entrepreneurs impress me most with a professional, but also kind/
down-to-earth presentation. I must believe that they believe in their
own product. They absolutely must be persistent. Angels get a ton
of emails and the way they stand out is through relentless follow-ups
('Oh here's this Pete guy again' vs. 'who are you again?'). Correct
spelling and punctuation doesn't hurt, either.”
— Candice Yoneyama
Angel from Los Angeles, CA
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18. “I'm impressed when entrepreneurs know their numbers inside and
out and are realistic about their valuations. I also am attracted to
companies who can tell me how they'll be successful if they never
get the next round of funding.”
— Jessica Magoch
Angel from Philadelphia, PA
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19. “For me it comes down to ‘Intrapersonal Communication.’ Every start-up has
a great idea usually born by a "visionary" that's going to create wealth.
What follows next are projections and marketing plans—every start-up has
them of course. So what's going to separate "YOU" from all the rest?
I'm swayed by people who can communicate and demonstrate to me why I
should share their passion and motivation to get involved. As the start-up
you're selling yourself, your company and your vision - and you have to
communicate to angel investors that you've got the ideas, the strategy, the
team and the ability to deliver what it would mean to become involved.”
— Don DeZarn
Angel from Eugene, OR
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20. “I'm an angel investor by day, comedian by night. One of the things I
look for when investing (in addition to the obvious question of can it
make money) is a sense of financial responsibility from the founders.
There's a tendency when using other people's money to fritter it away.
!
For example, you may recall that the founder of GoDaddy spent $90
on a conference table, and he said it works just as well as a $10,000
conference table. I like to see a sense of responsibility when it comes to
the environment, which dovetails with the idea of spending less money.”
— Dan Nainan
Angel from New York City, NY
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21. “Too many founders tread the fine line between arrogance and
ignorance. Their pitch style, in trying to be confident, comes off as
arrogant in saying they can beat the odds of failure at the pre-angel
level, and they can beat competition often far ahead of them.
Ignorance emerges when it’s often clear they haven’t really
researched competition, especially when I hear the deadliest and
dumbest statement: ‘No one is doing what we’re doing.’”
— Kim Garretson
Angel from Edina, MN
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22. “Entrepreneurs impress me when they demonstrate a proven
revenue stream before asking for capital. This shows they have
made a realistic assessment of the total addressable market (TAM)
they can capture. They should also show that they have measured
the cost of reaching that market by comparing a customer's lifetime
value (LTV) to the customer's acquisition cost (CAC).”
— Anthony Alfidi
Angel from San Francisco, CA
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23. “Keep your strategy, tactics, numbers, and stories in alignment. Use a bare-
bones streamlined business plan as the storyboard and make sure the summary
memo, pitch deck, and main stories all match. It seems obvious but I see more
than 100 pitches/plans every year, and at least half of them turn around and
eat their tails at some point.
Be a line, not a dot. Keep up with investors and show them progress over time.
Nothing adds credibility like milestones met.
Don't promise traction; demonstrate it.”
— Tim Berry
Angel from Eugene, OR
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24. “I love to hear brutal honesty no matter what, and a plus if it is tied to
past experiences, even childhood, that makes integrity and
transparency a top priority. Also don’t have an answer for everything.
If you get an obscure or surprise question no one would logically know
as a fact, ask the question back ‘I'm not sure, what do you think?’ This
will indicate what decisions will be like once in business together.”
— Dan Fugardi
Angel from Beverly Hills, CA
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25. Your complete guide to planning!
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Read the full article here:
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