An angel investor is a private individual who invests their own money in an early-stage company, usually in exchange for equity or a convertible note. Angels often invest before banks or venture capital funds will, and many add industry experience and contacts to their money.
An angel investor is a private individual who invests their own money in an early-stage company, usually in exchange for equity or a convertible note. Angels often back a business before banks or venture capital funds will, and many bring industry contacts and hands-on experience along with the cheque.
PitchStreet lists investors who say, in their own words, how much capital they have available and what they like to fund. Entrepreneurs can read those profiles, post a free pitch, and upgrade to message investors directly.
What angel investors look for
Every investor is different, but most angels weigh the same few things before they commit:
- A clear problem and a specific customer who has it
- A founder or team with the skills to deliver
- Early proof: sales, sign-ups, pilots, letters of intent or a working prototype
- A realistic amount to raise and a plain explanation of what the money will do
- A path for the investor to earn a return (growth, dividends, sale of the company)
How much do angel investors invest?
Individual angels commonly invest anywhere from a few thousand dollars to a few hundred thousand, and several angels often join the same round. Many investors on PitchStreet state their available capital on their profile, so you can see who fits the size of your raise before you reach out.
In the United States, most private company offerings are sold to accredited investors. For individuals that generally means income above $200,000 a year ($300,000 with a spouse or partner) or a net worth above $1 million excluding their home. Ask a securities lawyer which rules apply to your raise.
How to approach an angel investor
Keep the first message short. Say what the business does, who it is for, what traction you have, how much you are raising and why this investor is a fit. Offer a pitch deck and a call rather than attaching everything at once.
