VC Lingo: Angel Investors — Where Do I Find Them?
Angel investors want to hear from you, but you’ve got to know where to look.
Explained by Sean O’Sullivan, Managing Partner at SOSV…
Where do you find angel investors? Well, angel investors are people who are actually super successful in business or other professional careers. Maybe they were a doctor, a lawyer, a founder of a company, or a stock option holder in a company that grew to be very large. So you’ll find lots of angel investors in areas where technology has been a big economic multiplier for a given community. You’ll find them in Seattle, you’ll find them in Austin, Texas. You’ll find them in the New York area, you’ll find them in Silicon Valley, in LA. But how do you find them?
Oftentimes, angel investors will be mentors or they will be actively involved in accelerator programs. They will go to the accelerator demo days and be looking for opportunities to invest.
There’s a list of angel groups and an angel venture capital association. You can look for these different angel groups online in a given area. Look for angel groups in Philadelphia, Princeton, or wherever you are across the country.
Angel groups that are in a local area generally will only invest locally. And angels themselves normally will only invest in companies that are local to their community within 50 or 150 miles at the most. So you’ll find an area like New York will have the New York Angels and Philadelphia has three or four groups. I’m personally a member of one called the Delaware Crossing, which is one of the more active angel groups in the United States. In Boston, they have Beacon Angels and several other angel groups. You’ll look to speak to those angel groups and apply through a system like GUST. Many of the angel groups use GUST to organize their their flow of communications to the angel members of those groups. They take their applications, and then you present to these angel groups at their angel group meetings, where there’s maybe 30 or sometimes 50 or more investors. Sometimes 10 investors in a given angel group will just show up every month and look at new deals. So if you would apply to an angel group, you would maybe go through a selection process for that angel group. Once selected, you’d be one of, say, two or three new presenters at every meeting that angel group has. Then, hopefully within a few additional meetings, the investments will be coordinated through that angel group or individually through the members of that angel group into your company. That is probably the easiest way to find angel investors.
Another way, of course, is through going to family office association style meetings and trying to meet wealthy individuals that have fund management offices for those wealthy hundred to a hundred million plus style families that would be making a number of angel investments.
Those are the main ways to meet with angels: finding them through accelerators, finding them through angel groups, and then finding them through wealthy members of the community that are actively involved in the business community.
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VC Lingo is a video series from SOSV in which we define the terms and concepts you need to know to be fluent in the language of venture capital.
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