Little known secrets to pitch angel investors
- Call them when they’re feeling wealthy. This is tough to time but since angels are investing their own money, don’t call them when there is bad news which may impact their wealth. If the stock market has been down for weeks on end, it may not be the best time to call them since the angels may be feeling ‘poorer’. Of course, this is difficult to time or impossible to wait out if we’re in the middle of a long recession or downturn. Beyond the stock market, if you see they just signed a big deal in their business or experienced some good news, call them around that time. The more reverse due diligence you do, the better.
- Listen to them (even if it doesn’t make sense). Wealthy people who’ve been successful in building their own business usually will have credible and useful experiences, contacts or ideas that will benefit your business. So listen to them. Don’t tell them how they’re wrong and that you’ve found a better way at least not in an argumentative or disagreeable way. They are domain experts usually and so if your business is playing in their domain, you can constructively disagree if they are off base, but telling them their method of doing things has gone the way of the dinosaur is not the best idea. You have 2 ears and 1 mouth so it is best to follow the maxim that you should listen and talk in the same proportion. The other offshoot of this is that wealthy people such as angel investors may want to opine on things they don’t know about. If you know this is the case, there is no benefit to making them look or feel stupid. It’s best to listen to their counsel and respectfully add onto it and take the conversation in more fruitful direction if possible or say that is an “interesting idea that you will look into” if they are making no sense. Their rambling diatribe may tell you that they’re not the right investor for you if you are looking for value-add or if the idea of sitting down with them regularly makes you cringe. They may also be the right type of angel depending on what you are looking for from an angel. This is so called “dumb money” which is still money at the end of the day. There are no universal truths so there may be instances when taking the proverbial dumb money is a smart thing.
- Distinguish between those that talk about making things happen and those that make things happen. It has become fashionable to be an angel investor or thought of as one. It makes for interesting cocktail party conversation, and if you have enough money to blow on a longshot entrepreneur, that is a nice casual way of signaling you’re doing pretty well. Some angel investors seemingly collect startups the way others collect cars or other status symbols. Plus, it’s nice to be called an angel. But the reality is that showing up at angel investor group meetings or calling yourself an angel doesn’t make you an angel. So before you as an entrepreneur waste time pitching someone calling themselves an angel, see if they’ve actually made any investments and how recently. If they made one five years ago which didn’t work out, time to move on. Allocating your finite time well is an important skill.