8 Top Tips For Dealing With An Angel Syndicate

As a tech innovator investment is absolutely fundamental in achieving success. No matter how enthusiastic and sure you are about your product, it can sometimes seem that investors simply aren’t interested. 

There are various different options when it comes to investment, including: Founder’s Funding; Friends, Family or Fools Funding (FFFF); Grants; Loans; Angels; VC's, Crowd funding or Corporate Venturing and which options are open to you or which option will work best for you and your business will depend on a whole host of different considerations.

Angel investment is a form of investment that started out with relatively informal arrangements between people who were cash or capital rich who were seeking a direct investment opportunity and innovators or entrepreneurs.  In recent years, Angel investors have tended to group together and form syndicates or consortia, whereby they work together, pooling their funds and seeking opportunities.  In pretty much every case, an Angel investor (individual or consortium) will look for a chunk of your business in return for putting their hard earned cash into your entrepreneurial pot. 

With more and more entrepreneurs and innovators seeking Angel attention, it can be tough to get yourself in front of potential investors, but once you’re there, you owe it to yourself to make sure you have the best possible chance of success.  It’s for this reason we’ve put together this ‘8 Top Tips’ article to help you stand out from the crowd.  Here are our tips:

1.    Get a slick pitch.  In order to get over the first five minutes with any Angel investor, you need to work hard to make sure that your pitch is as slick as it possibly can be.  Never forget that Angels are accustomed to sitting through pitches from cash hungry innovators and entrepreneurs, so to get their attention, you REALLY need to stand out. 

2.    Rehearse.  Once you have your pitch polished to within an inch of its life, you need to spend time brainstorming the possible questions Angels will ask.  When you’ve pretty much exhausted the list of grilling questions you’re likely to face, you then need to get word-perfect with honest, but sales orientated responses to those questions. 

3.    Seek support.  It goes without saying, but only too often tech innovators try to do everything themselves.  It’s essential that you engage with an experienced, reputable corporate advisory team of lawyers, accountants and Patent Attorneys.

4.    Be patient.  Rome wasn’t built in a day and similarly, Angel investors tend not to make their decisions overnight.  It typically takes time for Angels to make decisions and securing investment can be lengthy and protracted.  The best message here is “Keep your cool”!

5.    Be honest.  While it may be tempting to ‘over egg the custard’ regarding your opportunity, this is never a good strategy.  At the end of the day, you don’t want anything unexpected to leak out when due diligence is taking place because this could lead to the investment deal falling through.

6.    Communicate proactively.  If there are any changes whatsoever to your investment proposition, it’s essential to advise potential investors well in advance so that they are aware of the changed circumstances.  Failure to do this could, once again cause your efforts to be worthless in the end.

7.    Listen.  Listening to advice can be a tough call for innovators, but you really must accept that these investors more often than not have a wealth of experience that’s worthy of your attention.  The message here is clear: be open to new ideas and suggestions and be clear and transparent with your communication.

8.    Be flexible.  More often than not, the initial deal on the table isn’t the deal that ultimately gets sealed, signed and delivered.  In this respect, it’s really important that you’re prepared to negotiate on valuation, corporate structure and other elements of the investment agreement if the reasons to do so make good commercial sense.

Vivolution is a management consultancy in Glasgow with focus being placed on supporting companies who have aspirations of revolutionising the healthtech, fintech and digital industry. Read more about what type of businesses we work with on our sectors page.