Who Are Angel Investors and How To Find Them? (8 Best Seed Funding Networks)

Whether it is seed investment to get your business going or capital for business expansion, angel investors are a prized source for both.

Keep reading to learn who angel investors are and how you can get them to invest in your startup.

What Are Angel Investors?

These high-net-worth individuals provide startups with capital in exchange for an ownership stake.

Angel investors can invest in any fundraising round but ideally fund startups in pre-seed or seed rounds.

The reason behind funding early-stage startups is that they get a larger percentage of ownership for the money they invest. 

4 Advantages Of Funding Your Startup Using Angel Investors

1. Better Flexibility And Risk Appetite

Negotiating with an angel investor is possible since they invest out of their own pockets, unlike venture capital.

Most angel investors are entrepreneurs who understand the risk of getting a business off the ground. The above attributes are highly advantageous for startups as the risk is high.

2. Lack Of Need For Repayment

Angel investors give your business money for an ownership stake, not as a loan. They buy into your business to reap the benefits of the development later.

On the off chance that your business goes under, angel investors don’t demand their money back.

3. The Added Inflow Of Knowledge

Angel investors provide you not only money but also a network, expert support, wisdom, and guidance. It will allow your business to grow and handle the issues that might arise with scaling up.

Angel investors are mostly experienced entrepreneurs who have been in your shoes. The insights that they can provide you can be of great value to your startup’s growth.

4. Most Abundant Source Of Seed Funding

Angel investors are everywhere. They are the best source of funding you can find to get your business off the ground.

Angels can be the boost that your startup needs to get going by investing in amounts ranging from a few hundred thousand dollars to a couple of million dollars.

Also, angel investors often get together to explore investment opportunities and invest in one another’s ventures. This provides you with a network of more investors you can tap into.

Finding An Angel Investor For Your Startup

Finding the right angel investor for your startup can be a ‘needle in a haystack’ search. The below steps can help make that easier for you.

Know Your Ideal Angel

When you know what you are looking for, finding it gets easier. Research and develop a profile for your ideal/typical angel investor. Here’s a list of parameters to look out for,

• Income level
• Age
• Net worth
• Successful entrepreneurial experience
• The average length of holding investments
• Average investment value
• Network size
• Favourite industry to invest in

Try To Be Closer In Distance with The Investor

Since an active angel investor is far better than someone who is hands-off, it is best to look for angel investors who reside close to your business. They should be within driving range so you can reach them when you need their wisdom.

Socialise and Network with Business Owners

You need referrals to reach most angel investors. You’ll need to network with the right person to find your ideal angel investor. So, socialise with local business owners and social communities.

Joining business and trade organisations is a good place to start.

Attend their meetings, trade fairs, and events regularly. Talk about your startup to people you meet there. This is a great stepping stone to finding your typical angel.

Look For Angels Who Hunt In Packs

Mostly, angel investors are part of an informal group that gets together and shares resources and knowledge. They pool their funds and make investments as groups too.

This allows them to distribute their risk over multiple individuals instead of one person taking the hit if things go under.

Here’s a list of places near you to look for such groups,

• Business development centres
• Community futures offices
• Economic development centres

Look Online For Connection Services

There are online services that match you with potential angel investors. Even if these services do not get your startup an ideal angel investor, they might be able to spread your business proposal far and wide.

Somewhere out there, a group might be discussing your business proposal while you hunt for your typical angel. This will play well to your advantage.

Best Seed Funding Networks For Startups

1. Angel Capital Association (ACA)

It is the biggest professional development organisation in the world, meant for angel investors. There are over 14,000 accredited angel investors and more than 250 groups and platforms on the ACA.

It’s a great resource to find angel investors from the USA, Canada, South America, and the Middle East.

2. Angel Forum

This non-profit forum provides you with a community of new and seasoned angel investors. It also offers workshops on angel investing to both entrepreneurs and investors. It is a great source of angel investors from British Columbia, Canada, and the USA.

3. Gust (Once Called Angelsoft)

Gust is a global platform for launching, operating, and investing in scalable, high-growth companies.

Gust boasts the world’s largest community of entrepreneurs and investors from 192 countries. It is a service that connects entrepreneurs like you with angel investors. Posting proposals are free, while you must pay a one-time contact fee to pursue a potential investor.

4. Angellist

It is a website dedicated to helping founders of tech startups raise funds from angel investors. Launched in 2010, AngelList has helped over 12,000 startups, with almost $10B worth of assets supported.

5. Golden Seeds Llc

It is an early-stage investment firm that specifically invests in startups founded by or run by women.

The angel investors from the firm invest in fields including software, technology, consumer products, and life sciences. The application process costs $50 and requires numerous pitch presentations.

A few other networks that might be helpful are,

6. Hyde Park Angels

7. FundersClub

8. Angel Investment Network

Good luck finding your perfect angel and scaling your startup from idea to reality.