Treat Angel Investor as if you are on a Date!

A smart founder tries to reduce the reasons why an Investor can say no!

The initial request for a dialogue is generally by email, so draft it nicely. Most of the investors are happy to converse with Co-Founders, so try not to muddle this up. It’s best to go through LinkedIn or reference, to capitalize on your best chances of getting a foot in the door. Nevertheless, do commit to memory that angels are busy, and you need to respect their time. It’s a good idea to propel a deck, so he knows what to anticipate, and can plan for the meeting.

This is very unlikely to be a one-time communication, where the investor is so intimidated with you and your pitch that he whips out his cheque book and hands over your cheque. It’s much more like wooing a girlfriend, and the purpose of your first date is to set up your next one.

You should spend time listening to his interests and passions, and judge whether you fit into his goals. During your process of raising money, one will come across all kinds of stuff, and not all of them will be right for you. While you are trying to earn his trust and confidence, you should also be thinking about – Is this the class of person who I want to be a part of my company?

While it’s usually easy to get the first appointment, some investors can play hard to get. The best way to open the door is through a warm introduction.

What about the dynamics of the meeting?

Please don’t ask for a NDA – no one uses them anymore because they are not worth the paper they are written on. Make sure you are on time, please respect time. Also, be professionally attired. First impressions count, and you don’t want to turn him off by being sloppy or casual – you are not Mark Zuckerberg! Show that you have done your homework about the investor, this is a mark of respect, and flattery never hurts ! The worst thing you can do during your first meeting is to ask for money, so please don't do this. The irony is that investors will give you money only if they think you don’t need it!

The agenda of the first meeting should not be to raise money – it’s to establish trust and get permission to set up the next meeting. How you conduct the meeting depends upon many factors, and you need to be flexible and play this by ear. If he hasn’t seen your presentation, you may want to start by going through this. However, in a one-on-one meeting, this is usually not a good idea, because you then spend more time looking at the computer screen, rather than establishing eye contact. Also, please don’t read your slides; don’t parrot your canned pitch; and don’t use your slides as a crutch. It’s far more effective to pay attention to his body language, so you can address the areas he is interested in. You need to focus on his responses, so you can tailor your presentation to his interests. Every investor is different, and while you may have slaved over your pitch and have 20 slides crammed with facts and figures to show him, please remember that he will not be interested in all of them. There’s no rule which says you have to complete your presentation, and you should not do a data dump – it’s far more effective to be focused!

Please take notes during the meeting (ask for permission to do so). This will differentiate you from most of the other founders, and shows that you value his opinion and his time. It shows that you are well-organized and thoughtful; and will also help you extract more value from the meeting, because you don’t have to worry about forgetting key points. If things are going well, ask for a follow on meeting – he is much more likely to say yes at this time.

Send a thank you email within 24 hours, where you summaries the highlights. What were the questions he raised? Do you have the answers? How will you find these?

Your plan of action should be to interact over a period of 3-6 months, during which time you can show him that you are making steady progress, and are listening to his feedback. This will show him that you are persistent, responsible and responsive.

Best Wishes