By João Kepler, winner of Microsoft's Spark Awards as the best angel investor of 2015
I have spoken in lectures and in several articles about the difficulties of entrepreneurs in finding an Angel Investor in Brazil or even understanding the moment to seek investment. In short, the entrepreneur needs to know is that he must prepare well before looking for an investment. An angel investor does not invest in one point, but in several points, invests in a progress bar in the timeline of a business.
The ideal is to present your startup when it is at least in the validation stage or ready to maintain itself and grow. But one thing is for sure, the best time to seek angel investment is when you don't need it. In addition, a good team of founders and project development is a fundamental factor in this choice, because angel investors invest in people and not just in businesses.
Well, I've prepared 5 tips to help you find the angel investor for your project.
1) What does the investor ask the entrepreneur?
What's the opportunity?
What problem will your project solve?
What is the innovation? What are your differences from what already exists?
What's the solution? How will your business meet this need?
What is the market? What is the profile of the customers?
What features? How much money do you need, in how long and for what? Besides money, what else will you need?
What is the estimated revenue? What, how, how long and where does the gain and monetization come from?
Who are the market players? Who are the main direct and indirect competitors?
What hypotheses tested? What are the barriers to entry?
What is the stage of the project? Initial, prototype, ready, invoicing?
Which team? Describe a brief history of each partner, main activities and interests in the business.
2) How to make a pitch?
The recipe for a good pitch for investors is preferably in this order of slides: problem statement, solution, market, competitors, business model, demonstration, team, expectations, investment and a grand finale/enchantment.
3) How to get angel investment?
There is no cake recipe, but depending on the stage of your project, there are some ways to find this “sponsor” depending on the situation of the person asking me. Some examples:
• If it's just an idea in your head, look for acquaintances and relatives, they can be your angels and/or participate in events like Startup Weekend.
• If it is a validated project, but still under development, look for a business owner who has an affinity or interest in your business as a priority, he can become an angel and/or submit your project to an accelerator.
• If it is a ready-made project that needs traction, sell your service or product on the market (customers will be your investors); Participate in events and demonstrate what you do; Submit to the evaluation of experienced angels to have a "godfather" or perhaps a Deal Leader, to attract investment; Fundraise on an Equity Crowdfunding Platform.
• If it is a project that has scale, traction and revenue that needs to be internationalized, look for a senior investor who can help you bridge the gap with larger investment rounds. Keep in mind that successful and qualified investors have defined and/or published INVESTMENT THESIS that filter deals and opportunities and you must first verify that your business fits what the investor is looking for.
• Depending on the value of your startup at the later stage, look directly for a seed or Venture Capital investment.
4) How long does it take?
The process for the entry of an angel investor in your business can take 3 months or more, between the investor's interest until the terms are signed and the contributions begin. If you are in a hurry, it can frighten the investor, as this type of investment requires time to establish a partnership and mutual trust, or it can simply do or talk or grant things that you may later regret.
5) What are the important things that the Entrepreneur has to worry about?
• Look for a mentor first for guidance, this mentor can bring experience and connections with investors in the market.
• Have a definite purpose, if possible even a cause.
• Opportunity opens up to those who open up to it. Show up at the right events.
• Maintain frequent interaction with investors not just to ask for money. Become a follower first and foremost.
• The best time to seek out an investor is when you don't immediately or desperately need his money. That scares! In this case, look for another type of financing or bank.
• Demonstrate your track record in past deals or that your current business is mature enough to prove it will work.
• Don't talk too much, keep the “simancol” at an optimal level.
• The investor will not only enter the money, he will certainly participate in the decisions and directions of the business; offer a seat on the Board.
• Value your team, nobody is so good as to do everything alone.
• Look for contributions other than money, experience contributions, connections and mentoring.
• Be humble and be very careful with the arrogance of the know-it-all.
The final tip I leave is that investment is a long-term relationship and involves risks for both parties, so the more adjusted and combined, the better.
I have spoken in lectures and in several articles about the difficulties of entrepreneurs in finding an Angel Investor in Brazil or even understanding the moment to seek investment. In short, the entrepreneur needs to know is that he must prepare well before looking for an investment. An angel investor does not invest in one point, but in several points, invests in a progress bar in the timeline of a business.
The ideal is to present your startup when it is at least in the validation stage or ready to maintain itself and grow. But one thing is for sure, the best time to seek angel investment is when you don't need it. In addition, a good team of founders and project development is a fundamental factor in this choice, because angel investors invest in people and not just in businesses.
Well, I've prepared 5 tips to help you find the angel investor for your project.
1) What does the investor ask the entrepreneur?
What's the opportunity?
What problem will your project solve?
What is the innovation? What are your differences from what already exists?
What's the solution? How will your business meet this need?
What is the market? What is the profile of the customers?
What features? How much money do you need, in how long and for what? Besides money, what else will you need?
What is the estimated revenue? What, how, how long and where does the gain and monetization come from?
Who are the market players? Who are the main direct and indirect competitors?
What hypotheses tested? What are the barriers to entry?
What is the stage of the project? Initial, prototype, ready, invoicing?
Which team? Describe a brief history of each partner, main activities and interests in the business.
2) How to make a pitch?
The recipe for a good pitch for investors is preferably in this order of slides: problem statement, solution, market, competitors, business model, demonstration, team, expectations, investment and a grand finale/enchantment.
3) How to get angel investment?
There is no cake recipe, but depending on the stage of your project, there are some ways to find this “sponsor” depending on the situation of the person asking me. Some examples:
• If it's just an idea in your head, look for acquaintances and relatives, they can be your angels and/or participate in events like Startup Weekend.
• If it is a validated project, but still under development, look for a business owner who has an affinity or interest in your business as a priority, he can become an angel and/or submit your project to an accelerator.
• If it is a ready-made project that needs traction, sell your service or product on the market (customers will be your investors); Participate in events and demonstrate what you do; Submit to the evaluation of experienced angels to have a "godfather" or perhaps a Deal Leader, to attract investment; Fundraise on an Equity Crowdfunding Platform.
• If it is a project that has scale, traction and revenue that needs to be internationalized, look for a senior investor who can help you bridge the gap with larger investment rounds. Keep in mind that successful and qualified investors have defined and/or published INVESTMENT THESIS that filter deals and opportunities and you must first verify that your business fits what the investor is looking for.
• Depending on the value of your startup at the later stage, look directly for a seed or Venture Capital investment.
4) How long does it take?
The process for the entry of an angel investor in your business can take 3 months or more, between the investor's interest until the terms are signed and the contributions begin. If you are in a hurry, it can frighten the investor, as this type of investment requires time to establish a partnership and mutual trust, or it can simply do or talk or grant things that you may later regret.
5) What are the important things that the Entrepreneur has to worry about?
• Look for a mentor first for guidance, this mentor can bring experience and connections with investors in the market.
• Have a definite purpose, if possible even a cause.
• Opportunity opens up to those who open up to it. Show up at the right events.
• Maintain frequent interaction with investors not just to ask for money. Become a follower first and foremost.
• The best time to seek out an investor is when you don't immediately or desperately need his money. That scares! In this case, look for another type of financing or bank.
• Demonstrate your track record in past deals or that your current business is mature enough to prove it will work.
• Don't talk too much, keep the “simancol” at an optimal level.
• The investor will not only enter the money, he will certainly participate in the decisions and directions of the business; offer a seat on the Board.
• Value your team, nobody is so good as to do everything alone.
• Look for contributions other than money, experience contributions, connections and mentoring.
• Be humble and be very careful with the arrogance of the know-it-all.
The final tip I leave is that investment is a long-term relationship and involves risks for both parties, so the more adjusted and combined, the better.
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