HOW TO FIND AND APPROACH ANGEL INVESTORS?

INTRODUCTION

Angel investors provide finances and mentoring to entrepreneurs and business founders. They
can be found using angel list, angel investing network, LinkedIn and local business groups
and schools. They can be approached in a group or individually. While approaching them
individually, preliminary research is of utmost importance.

If you choose to approach them through e-mails, be sure to keep it crisp, concise and effective. Some things that investors consider while deciding on whether to invest include market strategy, growth plan, data and statistics.

WHO ARE ANGEL INVESTORS?

Angel investors are wealthy individuals who provide financial backing to small business
ventures in exchange for equity ownership in the business. Angel investors are different from Venture Capitalists in the way that while veture capitalistfirms use an investment fund, angel investors use their own net worth. Angel investors have also been seen to be more patient with the entrepreneurs and business owners, as compared to venture capitalists and find reasonable methods of financing, such as smaller payments for larger amounts of time.

There are many advantages that come with being associated with an angel investor, such as
the fact that funds do not need to be repaid, because the business owners give away
ownership shares in exchange for money.

 Angels are also very experienced in their own fields of business; this makes them excellent mentors. They understand the trials and tribulations involved with building a business and provide much needed help and advice to entrepreneurs. It has also been seen that association with an angel investor increases the chances of the business becoming a success.

HOW TO FIND ANGEL INVESTORS?

In order to reach out to an angel, the following sources can be used: - 
1. Angel list, an online platform that helps business owners find angels.
2. Angel investing network, an online platform with more than 2,00,000 investors.
3. LinkedIn, a professional social network through which businesses can directly contact
investors
4. Local business groups or schools

HOW TO APPROACH ANGEL INVESTORS?

The process of approaching an investor varies from one individual to another. Some might
choose to reach out to investors individually while some might choose to present an elevator
pitch to groups.

Once you have decided to reach out to, and approach angel investors, it is important to
prepare accordingly. Some things that founders should keep handy are a solid business plan,
justifiable valuations, customer understanding and a good management team.
There are several investors who like to invest their money in specific fields or industries, that
are based in specific locations. Thus, while approaching investors individually, prior research
is very important.

If you choose to approach them through e-mail, make sure to keep your subject line
convincing, and your email crisp, concise and effective. It is important to cite statistics
because they build credibility and if possible, request for a meeting so that you can present a
more detailed pitch.

Lastly, be ready to answer all the questions asked.
The following are a few things that angel investors generally look for in a start-up: - 
1. You and your teammates- Founders prefer founders who are driven with a team that
works well together. If you’ve had any previous successful ventures, its best to mention
them as well. When it comes to weaknesses, it is always good to be honest and to also be
prepared with methods to tackle them.

2. Data and statistics- Current metrics and future predictions are an important point of
discussion. Investors need to understand your business plan for revenue growth, cash flow
projection, net income, customer costs and lifetime value.

3. Market information- It is essential for investors to know about competitors and market
shares.

4. Investment plan- Angel investors need to know exactly how their funds will be used.

5. Growth, challenges and strategy- Make a detailed business growth plan, inclusive of any
challenges that you might face along with business strategy, also mention any progress
you’ve had that validates your ideas.

10 FAMOUS ANGEL INVESTORS

The following is a list of famous investors, with information about previous investments,
which could help you choose an investor: -

1. Alok Mittal
Alok Mittal is the CEO and co-founder of Indifi, which is a platform that aids small and
medium enterprises with access to debt financing. He is also a founding member of the
Indian Angel Network. 4 He has participated in more than 30 deals.  Some of the
companies that he has invested in are GoCommet, Hoi Foods, iYogi and Envoged. 

2.Arihant Patni
Arihant Patni is the Managing Director at Patni Financial Advisors, he is also a co-
founder and director at Nirvana venture Advisors. He holds Board and Advisor roles at
Whodat and Grameen. He has invested in Onesto Labs, Kings Learning, Lido Learning,
Baby Chakra, and many more. 

3. Krishnan Ganesh
Krishnan Ganesh recently founded TutorVista, it was acquired by Peason, the education
leader in both, US as well as UK. He is a promoter and a strategic investor, in the field of
internet and e-commerce companies. His 3 most notable exits are POKKT, Overcart and
Browntape. Some of the companies he was involved with include Bluestone and
BigBasket. 

4. Kunal Bahl
Kunal Bahl is the co-founder and CEO of Snapdeal.com, which is India’s leading e-
commerce marketplace. He has won several awards including The Economic Times
Entrepreneur of the Year in 2015, The Joseph Wharton Award for Young Leadership in
2018 and The Economic Times Comeback Award in 2019. He has invested in more than
120 technology companies in India. 

5. Kunal Shah
Kunal Shah is the founder and CEO of fintech firm, CRED. He is one of India’s most
active Angel Investors. He has more made more than 200 investments. He holds stakes in
top fintech companies such as Rupeek, BharatPe, Razorpay, Khatabook, CoinSwitch
Kuber and many more. Mathur, the CEO of Razorpay called him the most helpful angel
investor that he has come across. 

6. Rajan Anandan

Rajan Anandan is the former Vice President of Google India. He is the co-founder of the
first seed fund in Sri Lanka. He is currently the Managing Director of Sequoia Capital,
India. He is known for investing in early-stage startups.  He has invested in Little Black
Book Delhi (LBB), Unacademy, POPxo and several others.

7. Rajesh Sawhney
Rajesh Sawhney has been responsible for setting up multiple successful businesses. He is
the co-founder of InnerChef. He is an active angel investor and has made more than 50
angel investments, including Little Eye Labs, Pokkt, Overcart, Browntape and Flinto. He
is also credited with having brought private radio to India in the early ninetys. 

8. Sanjay Mehta
Sanjay Mehta is an angel investor turned Venture Capitalist. He is the founder and partner
at 100X.VC, Indias first venture capital firm that invests in startups in their early stages.
Some of the companies that he has handled are Oyo Rooms, Box8, Unbxd, FabAlley and
WowMomo. 

9. Sharad Sharma
Sharad Sharma has more than a decade of experience. He has been the CEO at Yahoo!
and is the co-founder of iSPIRIT Foundation.  Some of the companies that he has
invested in include WishBerry, Minjar and Amigobulls.

10. Sunil Kalra
Sunil Kalra completed his Bachlors of Business Administration at University of Texas at
Austin. He has invested in several companies including Instamojo, Mobilewalla,
Prophesee, Blue Jay Finlease Ltd. (Ziploan) and many more. His skills include
negotiating and networking and he is always on the lookout for passionate entrepreneurs
who won’t give up. 

CONCLUSION

Angel investors are wealthy individuals who provide financial backing to small businesses
and startups. They also act as mentors to the founders. You can find angel investors by using
angel list, angel investing network, LinkedIn and local business groups and schools. Your
approach plays an important role in achieving the investment.

Choose your approach based on preliminary research. If you choose to approach them through emails, keep the email crisp and interesting. It is important to keep information ready on the team, data and statistics, market information, growth plans, challenges and strategy.

BY- SHRUTI NAVAYATH