In the previous article we focused on the topic: WHERE TO FIND AN ANGEL INVESTOR. In a question of HOW to find an angel investor should help you following tips. :) 

Define how much you need and don't forget on business plan

1 Have A Status File

Keeping track of customers requires CRM, why would you think you do not need a status file to help you with keeping track of your relations with investors? You are going to have a lot of conversations and meetings and you need a way to stay up to date with everything which is going on. 

You need to list investors, their contacts, similar companies they’ve funded, how far are you in dealing with them and any notes from your calls or meetings. If not, you are going to have a problem in having your head above all of this.

2 Define how much you need and what are you going to use it for

Damn this one is so obvious and sill we encounter start-ups which come to us and say "I need a 300K EUR." - "Ok, how did you came up with this number?" - "Well, I do not know, I guessed I would need something around that..."

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Often, we encounter start-ups who don't know how much they actually need and sometime even don't know how to calculate that. Well answer is not that hard. Define what you need to achieve to get through a next stage of your start-up development and sum up everything which needs to be paid for in a process of getting there. 

Example: to be profitable, to get to another market, to have 1000 users or even to start a legal company or finish a prototype. Then the calculation should look like this - Pay for a rent. Pay your team. Have a money for MVP. Pay for a marketing... All these summed up together are your aimed investment amount. 

You must NOT get into a situation where investor asks you how you came up with this number and you don't have enough arguments to back it up. It’s like you would ask someone for money and after he asks what are you doing to use it you say, “Well I don't know, but I need it.” that’s a total stopper for any questions asked further and you are off. 

3 Define, who are you looking for 

You can hardly find a right product without knowing what are you looking for. In a same way you need to define how much are you looking for you also need to define WHO are you looking for in an investor.

Should he be active and regularly help you out with your project? Or should he be passive and be more of a lookout who just makes sure everything is going in the right direction? Or do you even need someone who just gives you money and then just comes for a payback?

These questions are important in a same way in which you define how much you need and what are you going to use it for. You NEED to know what the investor should bring into the project apart from his money. Contacts? Experience in some fields? Help out with strategy, build a network, provide guidance?

Once you have these questions answered your search will be much more effective. Since if you know who you are looking for you will be able to more easily determine if the investor sitting in front of you is the right one or not. 

4 Create Your Quick Pitch

You need to have a pitch and event more, you need to have it in your head. Whenever you encounter a potential investor for your start-up you aren't going to have time to bring out your notebook and start a presentation you had prepared. You should have a quick pitch in your head which you could tell to anyone even if they would wake you up in 12 am.

What are you doing? Where are you currently at? What do you need and what are you going to use if for? These questions should be answered in matter of minutes to a potential investor standing in front as you usually have 3 min or even less. Sometimes miracles works for you so you just need to be ready for it :)

5 Be Prepared for No

Be prepared for “No”… at the end of the day it's just finding the right fit, so it’s ok to hear one hundred "no"s if you get one "yes" from a right person. If someone who is not your “focus group” says “no” to you it doesn't have to be that big of a problem. Because it's actually better to feel moments of pain by hearing “no” than to spend years with a wrong partner. Just keep going, on you can easily have 100 investor meetings and hear “no” 90 times. And the other ten will tell you “maybe.” And from those ten, you might get a few people to say “yes” and you need just one “yes” to reach your goal so keep going on.

6 Understand the Process

Fundraising is usually not a quick process. We had a project for which we found investment in 20 minutes after enlisting in our database and we had a project which got an investment after being enlisted on our website for 13 months. Even if you speak with the investor for a first time, it usually takes up to few months or maybe longer before he actually invests in your project. It depends on your preparation, stage of your project, amount of the investment you are looking for and other factors coming to play. Whole process usually takes quite a time. You have to set up meetings, attend them (preferably), follow them up afterwards—it’s like having a second job.

What can save you some time is going through business angel network like Busyman. It can help you with pitching your start-up to hundreds of investors at once thanks to it’s network accumulated through years of existence so you don't have to go and pitch each one individually. More about us and our process of enlisting start-ups in our database and communicating them to investors can be found HERE.

So it is not that complex, you just have to keep on and if you are going through an intermediary or look for an investor by yourself it is going to require resilience and courage. 

But it gets easier. Once you have successfully fundraised once, you will have a good idea of what the process entails. Each time, you become a little more educated and aware of what is required to succeed, and you get better at it. At the end it’s just talking to people about your passion and looking for a right partner :)

NEXT ARTICLE: WHERE TO FIND AN ANGEL INVESTOR