How I Raised Over $1,000,000 Pitching To Angel Investors

The best investors look at thousands of companies a year and only invest in a handful. Statistically speaking, you have a better chance of getting into Harvard than raising investor money. Yet some people seem to just wave a hand and get hundreds of thousands, if not millions of dollars of investor money without even trying. What's their secret? Well, here's 10 things I've learned from raising over a million dollars in angel investing for my startup. Tip one, sell yourself, not your product. In the early stages when you're meeting with angel investors, there's kind of two problems with selling your product. One, it's probably not that good. You're probably still early on. And two, angel investors are not really investing in your product as much as the person building it. So you really need to sell yourself, your background. why this idea matters to you and how your sort of unique insight is relevant to the market. And then you can talk about your solution, which is your product, but just a little. Don't go too in-depth. Angel investors don't want to hear about like screen 17 of your app and how this blue button does this. That is not relevant at the early stage, but especially at the angel stage, they're really backing you and your vision. So don't get into your product too much. Two, be excited, but not Pitchy what I mean is like pitchy is you walk in and you've got this fancy deck and you're like hey look at our idea Look how great it is You're gonna make a ton of money if you back us that is not the sort of stance that you want again in any fundraising But especially with angels you want to just be genuinely excited about what you're building You should think what you're building is awesome You want to tell them about it why you're excited and then see if they're excited as well And so it's much more of a hey, I'm super excited to build this Are you excited too because we'd love to bring in excited investors to help us build this and make it a reality not hey check out how awesome this is it's going to do xyz we're going to change the world and i hope you can invest now before like this deal is gone Third tip, do not send the deck ahead of the meeting if you can avoid it. What I mean by this is a lot of investors just have this natural default response where they get introduced to someone, hey, do you have a deck? If so, can you send it over? Well, I've sent my deck out to hundreds of investors and I can tell you this, the average investor spends about a minute and a half on your deck and they spend about five, 10 seconds on each slide. What they're doing there is they're not reading to see, is this something that I want to invest in? That's not the way investors read decks. What they're doing is they're seeing, is this something I don't want to invest in? I don't even want to waste my time meeting with. And so by sending the deck ahead of time, there's basically no way they will read your deck and write a check. There's a high likelihood. that they will meet your deck without the context, without you actually explaining what you're doing, and they might pass on the meeting entirely. And so a lot of investors will ask for the deck, and this is sort of like a real challenge. But what you can just say is, listen, we're early in the process. We don't have a deck right now. Here are a few more highlights to get you like a better sense of our business. And I think I'll have a deck ready by the time we meet, and I'm happy to walk you through it live then. This works way better than setting the deck ahead of time, even if you have one. Now some investors will be really insistent and say, listen, I don't meet with anybody unless they send a deck over, so like either send me a deck or we're not meeting. I will admit in these cases I have caved and I sent over my deck, but you know what? I've never gotten a check from someone who insisted on the deck before a meeting. always works better if you can give the context in your live energy to actually walking through your business rather than just sending a deck fourth tip try to keep intro meetings to 30 minutes when we first started out our assumption was hey if i have an hour-long meeting that means like they're more likely to invest because they spent an hour with me versus 30 minutes with me what we actually did is we split tested this and through hundreds of meetings i can tell you 30 minute meetings actually have a much higher conversion rate for us i think the reason is when you spend 30 minutes in It's enough for the investor to get excited and sort of use their emotional aspect of like, hey, I really want to learn more and this is really exciting, but not so long that they start to really dig in and they go from an emotional response to a logical response. It's the same way people like buy things, they buy with emotion and then justify with reason. But if they spend too much time thinking about that purchase, they may never make it. It's the same thing with angel investing. And so I really recommend have your initial meeting 30 minutes, hit it off like it's playing at a high level. And then if they want to dig in more, say, hey, this is great, but let's set up another meeting, maybe an hour then, and we can go in in more detail. But you want to really leave that first meeting with a high level of excitement. And I find 30 minutes works way better for that. Also, bonus tip, helps you save your time. Fundraising is really time consuming. So if you can do all this with 30 minute meetings at the start rather than 60 minute meetings, you can do twice as many meetings and it is a bit of a numbers game. So 30 minute meetings to start. Fifth tip, when you walk into that 30 minute meeting, super important that you own the agenda early. What normally happens is if you're an angel investor, you're meeting with hundreds if not thousands of companies and you again only invest in a few. So you have this default rhythm that you run. You meet with founders. pitch you your idea and then you just pass. And so you need to break them out of that cycle. And the way you do that is by owning the meeting. It's your meeting, not the angel investors meeting. So the way that I do this is I walk in and say, hey, so-and-so, it's great to meet. I'm glad that, you know, so the person put us in touch for great things, you know, but. To kick it off, why don't you give a little more background on yourself, give a quick intro. I'll do the same and then I'll naturally transition to telling you what we're up to, what we're building, and then we can make time for like neutral questions. I'd love to ask more about you and vice versa, I'm sure. That sets the stage where it's like, hey, listen, I'm not better than you, but you're certainly not better than me either just because you have money. I have an idea that might make you a ton of money. So like, let's get to know each other in this meeting. And again, I'm running the process, not you, investor. And so set this agenda. Otherwise, what can kind of happen is like the investor can sit back and say, so tell me what you got and it's this kind of like weird dynamic where you're really like trying to climb uphill basically and the investor has a stance of like I always pass on these things but every now and then I invest but like try to impress me that does not work and you won't get any checks that way so set the agenda early on stick to it and you'll have a way better success in these meetings which brings me to tip number six when you're actually going into these meetings be on the same side of the table literally if possible. What I mean by that is, you know, it depends on what you're meeting, whether it's a coffee shop or a conference room, but what often happens in these sort of settings is one person sits on one side of the table, the other person sits on the other side of the table. This creates a problem because it's sort of this Like you versus them, them versus you dynamic. It's not collaborative. It's not helpful. What I want to be is ideally, so you know, the investor is sitting next to me like at a table. I've got my laptop in front of me and we're both looking at this vision ahead of us, looking at this future that I want to build and saying like, hey, look how excited I am about this. check out what we've discovered so far. Like, how do you think you could help? What do you think about this? It's a very collaborative process when it's going well. When it's not going well, it's like you're on the other side of the table. Hopefully they're not too far, but it could be like six feet away on a big conference table. And you're like, here's what we've got. And they're sort of, again, sitting back, judging if you're good or not. I really don't like this. The way that this generally works out in like coffee shops or more casual places, and I generally try to do my first meetings in casual places, it's just... do 90 degrees so i sit on one side and they sit next to me but not necessarily like literally side by side and in conference rooms big rooms i try to do the same thing what you really don't want is like they're at the head of the table you're at the other head of the table again it's just it's a body language thing it's a signaling thing but it's also just a dynamic of conversation You would not sit six feet away from your friend if you were hanging out and talking about your new idea. Have that same dynamic when talking with investors. Now, as you wrap up the meeting, it's critical that you define the process with the investor and then hold them to it. Here's what I mean. After you've done your pitch, you've done your Q&A. What I always like to do is say, hey, this was a great meeting. I'm glad we connected. For you and your investment process from a meeting like this to why you're in the bank, what does that normally look like? Can you walk me through your steps? And so you're putting them in control. You're not forcing them to do anything, but they're going to have to come up and say, well, actually, you know, after a meeting like this, let's see, they're an angel investor. So I like to call, you know, a couple of my friends who know the space. I'm going to bounce this idea off them. And then I like to do a little bit of market research. And then like, if that goes well, I'll usually ask for one more meeting. And then I write a check. Like, okay. great that sounds great so just so I can repeat call your friends do your research and then one more meeting and then you know we could have a sort of a yes no so like how long does that take do you normally spend like a couple days in this research when do you think you'll meet with these friends and they're like oh yeah like I think I can do it this weekend and then like can probably sort of dig into the research on Monday and then like kind of go from there okay so like if I don't hear back from you on Monday I'll follow up And if you know, assuming your research looks good, let's try to meet like Wednesday of next week. Does that sound good? And they'll be like, oh yeah, I guess that sounds good. And now rather than having this vague investor meeting that like you think went well and sort of ambiguous is what's next, you have. people buy things called options. All an option is, is the right to buy a stock in the future at a given price today. And this is a multi-billion dollar industry. Because public investors know, i.e. buying stocks and things like that, that it's super valuable to be able to buy stocks in the future as you gain more information at a given price today. In the private market, founders give away options all the time for free by letting investors just sit on their maybes. They say, hey, you know, it was really great meeting, but we're still thinking about it. I still need to talk it over with my wife, my husband, my... My family, whatever, I'm still doing research into the market. What they're really doing is stalling for time because if they say no to you and then all of a sudden Sequoia and Andreessen and everybody else gives you term sheets, they don't want to miss it on that round. So it's in their best interest to stall, sit in the maybe column as long as possible so that they can jump back in in case they learn something new. This will kill your round. you will think you have a bunch of people who are maybes and you'll be like well okay i have 30 maybes so if even 10 of them come in that's three investor checks i'm basically done it doesn't work that way but you actually have his 30 no's they just don't want to say it yet and so you have to do the painful thing of pushing people to a yes or a no. I feel this deeply and I know there's going to be this concern. I'm so familiar with it. I feel it every time like well maybe they're just not ready yet and if I push them too much they'll be a no but if I just gave them more time they'd be a yes. It's not true. They can make the decision up. Eventually if you really want to go for it and this is what I've kind of like settled on doing as I've just gotten more and more used to this is I'll say hey listen I haven't heard back from you or it seems like you're still thinking it sounds like you're probably a no so I'm just going to take you off my list. Please let me know if that's not true and then we can figure it out and like go from there. And if they're really a yes and you try to kick them out of the round by calling them a no, they'll really quickly correct you. But what usually happens, there's sort of these silent no's is they'll say, yeah, you're right. You know, we're still just like struggling with X, Y, Z and would love to keep in touch for future rounds. And you can leave that door open and you can talk to them later. But like they were really a no the whole time. So do not let investors settle in this sort of maybe category. move them to a yes or no. Tip nine, you have to get good at absolutely crushing investor questions that they ask in the Q&A. Now, early on, as you're doing your pitch to your first couple investors, they're going to ask you questions like, hey, how many people in the US would want to buy your product? Or have you thought about like your mobile strategy? Whatever, it doesn't matter. What you'll find is that early on, your answers probably aren't that great. It's the first time you're being asked. It's maybe something that you didn't think of. And you just don't answer super well, not in a convincing way. What I like to do is after every meeting, take a list of every question that investor asked. And there's two possible outcomes. One, if I feel like I did not answer it well in the meeting and I think it's really important to the investor, I'll shoot them a quick follow up. Hey, I know you asked XYZ. I'm not sure that I explained it super well. So here's a bit more information about it. I hope it helps. I did this once where I was like super sick and I was pitching this investor. My head just wasn't like. I couldn't think straight. And so they asked me about market size and I kind of fumbled the numbers. I didn't have good sources and I knew I just botched it. And so after the meeting, I sent an email following up saying, hey, listen, I don't think I answered your market question super well. Sorry, I'm getting over a cold. Here's everything you need to know about our market. And the investor actually responded, listen. This is the best follow-up response we've ever gotten. To be honest, we were going to pass on the round because we were really concerned about the market. This makes it much clearer. So actually we're in and I ended up turning them into a $250,000 check. So you can really turn bad meetings around by really crushing these follow-up questions. However, that's one way to handle questions. But the better way is to actually deliver an amazing answer in person when you hear it. And the way you do this is again after every investor meeting I'm writing down the questions and over time after you do 10-15 meetings You'll start to see like the same three to five questions keep coming up And so what I'll do is I'll take those questions and I will like do all the research I can about those questions I'll find sources. I'll find data I'll write out my response and I'll make sure that it is the best possible response I could ever think of to answer that question. And so the next time an investor asks me that question, I'm not going to give them just the first thing that comes off my head. I will give them a super robust comprehensive answer that I know they're gonna love and is also of course true. I'm not gonna lie but I'm gonna give them the best answer possible. And so really the art of like raising capital becomes meeting with investors, hearing common objections or common questions and then developing your skill set and your sort of repertoire of answering those questions until it's super high caliber. So when you get asked the questions you answer a 10 out of 10 whereas your first couple times might be a 5 out of 10 or a 6 out of 10. Tip number 10, once they are in ask for other intros. This is the way real angel rounds get done. Rounds don't really come together where you get all these intros and then all those investors come in or some portion of them come in. What usually happens is you get these intros and only a couple people come in but the people that do come in know other angel investors and so you can often turn a 10k check or a 25k check into like five 25k checks this is exactly what happened in our rounds we would get like a 25k investor and then i'd say hey thanks so much for coming in do you know anyone else that might be interested in the round sometimes investors will be great about this like they know how the game is played in this like yeah i've got five buddies i think they'd all be good fits i'd love to introduce you let me make those connections now sometimes though They don't know. They'll say, you know, I don't really know anyone else. I'm not like that big of an angel investor. What I do is I will go online and comb their network. I'll look at all the other companies that they've invested in, all of their like connections on LinkedIn, and I'll try to build a set of any investors that they might know. And I'll follow up and say, hey, I was doing some digging and actually came across like these 12 people that I also think would be a good fit. I saw you guys are connected through XYZ or online. Do you think any of them would be possible for an intro? And what I'll usually find is that they won't be able to intro to all 12 to me. Like they might either be on bad terms or just not. know that person really well, but they can probably get a few more than they realized on their first thought. And so all of a sudden, again, you're getting more investor intros and these intros are super warm because this person's already putting money into your company. Now, really big caveat here. When you meet with investors, a lot of them will say, hey, this is great. I'd love to introduce you to my friends, but they'll do it before they actually commit to investing in year round. Do not take these introductions. They're not. trying to be unhelpful but what is going to happen is if they introduce you to the five of their friends that they really trust and all five of their friends pass well you just lost five potential investors but you probably also lost the first investor that you were talking to because they're going to feel really foolish if they invest when five of their friends just passed so whenever someone offers to make introductions before they've committed to the round i always say this hey listen i would love those introductions so much and i really appreciate you offering them but like First, let's sort out our business and make sure that you're actually interested in this round because I know if you choose to invest and then introduce me to those folks, I'll have a much higher chance of converting them and they'll have a lot more signal because you're in. So let's figure out if we want to work together first and then I will definitely take you up on those intros. It's a subtle difference, but it really makes all the difference. And get their commitment in writing because if they only verbally commit and then their five friends pass, they might say, well, you know, I was still thinking about it and it's just not a fit for me. Get their commitment in writing, either signing a term sheet or an email. handshake and then you're good to go now if you liked this video please consider subscribing clicking the notification bell i make videos like this all the time to help founders like you get their company started get angel investing and ultimately build a successful company hope to see you in the next one

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