2. The challenges of Finding Angel Investors for Startup

Having no or little traction

Angel investors need to see some traction before they decide to invest i.e. sales, revenue or number of current customers. A good traction works as proof for the demand of the service or product and that is what angel investors ask for. Having just a good business idea won’t help in convincing angel investors. You need to show some traction.
Poor presentation of your financial model and forecast.

Angel investors need to see a good financial operating model of your startup that shows different future scenarios and growth potential so that they can decide if your startup is worth investing in. This will help them in having an idea about the profitability of your startup.
Poor fundraising strategy.

Having a good fundraising strategy will help you determine the amount to be raised for each round, the valuation of your startup, and the equity should be given. These factors will help you in determining the type of angel investors you need to approach.

Approaching angel investors without having a funding plan in mind will affect your chances of securing the desired capital.
Unrealistic valuation of the startup

The inability to determine the right startup valuation has a great impact on your efforts of finding angel investors as putting too low or high value on your startup might make you end up with the wrong angel investor and will affect your business growth and future fundraising efforts.

3. How Skyson Capital helps you Find Angel Investors for Startup

3.1 Find Angel Investors for Startup and Review your pitching documents

When pitching to angel investors, it is important to have a clear and concise pitch document. This document should include an overview of your business and your team, your competitive edge, your financials, and your business model. Additionally, it is important to make a strong case for why your company is the best investment opportunity.

There are a number of ways to review your pitching documents. One way is to read them through once and make sure that they are well organized and easy to follow. Another way is to read them through and highlight any key points that you want to focus on during your presentation. Once you have reviewed your document, it is important to prepare for your meeting.

Before pitching to angel investors, FasterCapita’s team will work on reviewing your pitching materials (startup pitch deck, business plan and financial operating model) and share them with a small circle of angel investors and ask them for their feedback in order to improve them and make sure they contain all the necessary info about your business that angel investors will ask for.

3.2 Find Angel Investors for Startup and Pitching Coaches

We meet with entrepreneurs and check their presentation skills and provide constructive feedback on what should be worked on to ensure that the pitching process will be successful. Read more about our pitch your startup service.

3.3 Find Angel Investors and Create a fundraising strategy

Skyson Capital sits with the founders and discusses with them all the possibilities and scenarios for raising capital in each round. We create a fundraising strategy and set achievable milestones. In this phase, we assist the entrepreneurs in startup valuation, identify the amount to be raised and the equity should be given based on the startup valuation and other factors. Read more about our planning for raising capital service.

3.4 Find Angel Investors for Startup through Smart matching with our AI system

We often hear the phrase “finding the right investor” when starting a new business. While this may be true in some cases, there is another way to find the right investor for your business: by using an AI system.

An AI system can help you match with investors who have the right skills and interests for your business. It can do this by parsing through publicly available data to identify investors who have invested in similar businesses before. This can help you find investors who are likely to be interested in your venture, and who are likely to provide the best return on investment.

This type of matching is called “smart matching.” It’s a powerful tool that can help you find the right investor for your business. By using an AI system, you can reduce the time and effort required to find the right investor. Plus, you’ll know that you’re working with a reputable partner.

We match founders with the right angel investors through our AI system. The AI system takes lots of parameters into account such as the location of the investors, their investment history, their recent exits and whether they have invested and exited from similar startups or not. The founders will also be matched with angel investors based on the startup stage and industry.

3.5 Find Angel Investors for Startup through Warm Introductions to Angels

After the matching process, we come up with a list of the suitable investors and introduce the entrepreneurs to them. We also explain the startup to the investors and answer their questions. We act as the first line of customer service for the founder and address the questions about the startup. Skyson Capital will highlight each investor and how soon they might invest.

3.6 Find Angel Investors for Startup and Prepare the due diligence

When you’re looking to raise money from angel investors, one of the most important things you can do is put together a strong due diligence plan. This document will outline your business, your team, your financials, and your strategy, so that you can be confident that your angel investors are getting the best possible deal.

If you’re not familiar with the term “due diligence,” it’s basically a process of doing research on a potential investment before agreeing to invest. This means going through all the information you can find about the company, its team, and its products or services.

Skyson Capital prepares the entrepreneur for the due diligence phase even before pitching to investors. Our team will help you in gathering the necessary information i.e. your financial records, intellectual property, legal records and other records and data that angel investors will be asking for that help them in studying the financial performance of the startup and making their investment decision.

3.7 Find Angel Investors for Startup and Negotiate terms with them

We help the entrepreneurs in negotiations with angel investors by coming as an intermediary and trying to bring opinions together. We will also advise the entrepreneur on the right terms and what should be signed in the terms sheet and legal contract with the angel investors

4. Find Angel Investors and Match with Angel Investors for your Startup

It’s very important to study the profile of the angel investor and check what they have invested in in the past so that we can be sure that there might be some interest in our startup. Skyson Capital goes even a step further and checks the investments that angel investor has done in the past and what successful exits they made so that we can understand better their interest and investment criteria.

Skyson Capital will also estimate the amount of money each investor usually invests per year based on their previous investments in the last years and according to that we can predict approximately how much money the angel investor is willing to invest in new ventures. Of course, all of these are merely indicators and approximations but they impact the success rate we can reach when approaching the angel investors.

Another important thing that we do in matching with angels is that we filter out angel investors who have invested in a competitor startup. Many entrepreneurs underestimate the risks associated with spreading their pitch deck and information widely and sending them to as many people as possible. Moreover, some platforms will allow you to put your pitch deck available to everybody and entrepreneurs usually don’t see the risk associated as the info will be available for fake investors and people whose goal is to search and find what competitors are doing and try to borrow or copy some of their ideas or strategies. At Skyson Capital, we know the risks involved and we never send mass emails or put the pitch deck in an accessible place for everyone.

So matching is not an easy process. One should take several parameters into account, such as how much money the angel investor invests per year, their ticket size, and their previous exits to find the right angel investor.

Skyson Capital has an internal network of angels where we have all the info needed about the investor and we communicate with your team to know as much as possible about your business and then we find angel investors who would be potential future investors in your startup to create win-win scenarios. We help early stage startups find angel investors to get early funding through our Idea to Product program and more advanced stages through our Raise Capital program.