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How to Find an Angel

Posted by Early Growth

December 17, 2018    |     4-minute read (695 words)

By: Lidia Salgado, Director of Business Development, NYC

Securing an angel investment can sometimes be akin to a Christmas miracle.  With Seed rounds continuously becoming what Series A used to be, entrepreneurs turn to business angels with an increased enthusiasm. Individual angels, angel groups, and online syndicating platforms are a Promised Land for truly early stage entrepreneurs, but it can be hard to navigate one’s way to an angel investor that will become your business’s backer and champion.

According to Angel Capital Association, “every year 200,000+ American angels invest an estimated $25B in more than 71,000 startup deals”, which, surprisingly, represent 90% of outside equity for startups. In spite of such large impact, information on these high net worth individuals has been somewhat scarce.

Who are they?

Angel Capital Association teamed up with Wharton Entrepreneurship to conduct The American Angel, a national study of 1,659 accredited angel investors in the U.S. To sum it up, the study found what angels are not: angels are not mini-VCs. The authors of the study concluded that “angels are more diverse than VCs, both geographically and with more participation by women”. Furthermore, there is no dominant focus on tech investments, as is the case with venture capitalists.

Here are some of the key findings included in the report:  

  • 63% of the angels in this study are located outside of San Francisco, New York, and Boston.
  • Women comprise 22% of angels, and are 30% of angels who started investing within the last two years.
  • Angels with the longest tenure write bigger checks, have larger portfolios, make more follow-on investments, and see better returns.
  • More than half of angels (55%) have experience as entrepreneurs and often advise the startups they invest in, informally or as board members.
  • Median size check across the country is $25,000.

How to pitch them?



Stephen Messer, an angel investor, inventor and serial entrepreneur, suggests that pitching an angel investor is best done over a period of a few months. Personally, Steve invests in entrepreneurs with whom he developed enough of a relationship with to witness their performance (even pre-official start of their company) and attitude over time. In Steve’s opinion, if you are meeting angel investors for the first time at the time that you are actively trying to raise money – in the shortest period of time possible – it is pointless. A better strategy is to proactively connect with angels well in advance of your active fundraising days; specifically, seeking to meet entrepreneurs who recently exited their companies would be helpful.

According to Lesley Stroll, an angel investor and executive at Angel Investor Forum and Wharton Alumni Angel Network, angels’ primary question is “How will we make money?”, followed by how great (or not) startup’s management is. Too often, entrepreneurs focus on product and market, leaving out monetization (and returns!), and what they personally bring to the table. Other factors that are often negatively viewed by angel investors include the wrong type of business – either a lifestyle business or a capital intensive one, crazy valuations, complex licensing requirements, and founder stubbornness.

Finally, if you are pitching an angel group, it is helpful to find your “sponsor” within an organization. Not only having a single point of contact proves to save time and effort when syndicating an investment within an angel group, but also many angel groups rely on a “lead” angel to drum up interest in a deal, perform due diligence, and ultimately pull the proverbial plug.

With so many active angel investors around the country, finding “your” angel may seem like searching for a needle in the haystack. Starting early, looking broadly (this directory is a good place to start) and clearly communicating your value proposition will help increase your chances of successfully getting angel funding. Best of luck – and let us know if we could help hone your pitch.


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