How to find angel investors for your startup

What is a business angel, and what do they bring?

A business angel is a private individual who takes a stake in a young company using their own wealth, often a former entrepreneur, a senior executive or an industry expert.

Beyond the money, they bring advice, customer or partner contacts, help with hiring and credibility that is useful in later funding rounds.

When should you approach a business angel?

Business angels usually come in once the founders have used up the non-dilutive sources available at the start and need to accelerate; see our guide to pre-seed funding.

• ✓A complementary founding team committed to the project.
• ✓A problem confirmed by potential customers or users.
• ✓A first version, an advanced mock-up or first users.
• ✓A funding need that is costed and tied to specific milestones.

Where can you find business angels?

• Business angel networks, regional or sector-focused, which organise pitch sessions (in France, many are federated by France Angels).
• Incubators, accelerators and schools, whose demo days bring investors together (incubator, accelerator or startup studio).
• Your professional network: former executives in your sector, convinced pilot customers, entrepreneurs who have sold their company.
• Other founders, who can introduce you to the investors in their own startup.
• Specialised platforms, including the EasyCofounder investor area, where you can present your project to registered investors.

Favour people who know your market: their expertise is often worth as much as their cheque, and they will grasp the value of your project faster.

How do you approach them and present your project?

An introduction from someone they trust remains the most effective route. Failing that, a short, personalised message is better than a mass mailing.

1. 1Explain the problem, the solution, the team and your progress in a few lines.
2. 2Say why you are contacting this particular person (sector, experience, network).
3. 3Attach a short deck or suggest a twenty-minute call.
4. 4Prepare answers to the classic questions: market, competition, business model, use of funds.
5. 5Send regular updates, even after an initial no.

To build a clear and convincing presentation, use our guide on how to pitch your project.

How does a business angel’s investment work?

After the first meetings, the business angel looks at the project in more detail, meets the team and sometimes customers, then sets out their terms in a letter of intent or a term sheet.

The investment often takes the form of a capital increase or of an instrument such as the French BSA AIR (a convertible instrument comparable to a SAFE), and comes with an update to the shareholders’ agreement.

• The company’s valuation and the share of equity given up.
• Information rights: how often reports are sent and what they contain.
• Any voting or veto rights over certain decisions.
• The expected role: pure investor, adviser, member of a strategic committee.

How do you choose the right business angel?

A business angel becomes a shareholder for several years, so choose them as carefully as you would a co-founder.

• ✓They know your sector or your type of customer.
• ✓They are available and clear about the help they will give.
• ✓Founders they have already backed speak well of them.
• ✓Their expectations (exit horizon, involvement, rights) are compatible with yours.
• ✓They can, if needed, reinvest or introduce the project to other investors.