For an early-stage startup, angel investors provide an essential source of funding that can often make or break a company’s ability to survive.
Angel investors can also benefit founders and fulfill essential roles in less obvious ways- that’s why one of our core teachings is to build and leverage an Angel Army throughout your fundraising journey.
To help startup founders understand the various ways angel investors can assist, we asked fellow startup leaders and entrepreneurs this question for their best insights. From leveraging industry connections to lending credibility, here are several ways that angel investors can help your startup succeed.
"Support- A handful of our investors made themselves readily available - "Seriously, call whenever. I want to see you and the team be successful." Through opening this channel, they have provided me a space to share the good, the bad, and the ugly. One of them even shared his office space in a prime spot in Austin for us to bunk up in order to save cash. Our offices are next to each other and his doors always open. Game changer.
Networks- On many occasions, I have sent a forwardable email to one of our investors with a list of their connections I conjured together through LinkedIn asking for intros. And they have not only made the connections to CEOs but have vouched for me. Their endorsement and trust has not only opened doors but has provided me confidence to get in front of more C-suites as we continue to build."
"Angel investors often invest in specific industries where they accumulated experience and build relationships. Their broad networks are usually unique assets they bring to the business. It enables founders to establish contact with business leaders and other advisors. They may also recommend other trusted firms across the supply chain to unlock synergies and expedite building competitive advantage."
"Some of our angel investors are celebrities. Their name recognition, obviously, helps us a great deal. It assists in raising the profile of our brand and all of our products. Right after Snoop Dogg became an investor with us, we did a Facebook Live to announce it. Doing these kinds of appearances definitely helps our online presence as well."
"When actor and activist Jaime King invested in my startup, it gave us a new layer of credibility. There is a lot of compelling data in favor of influencer marketing, so finding a well-known investor is advisable in the founder community. People trust celebrities, so having one get behind your brand is an effective way to expand your total addressable market."
"If you're lucky enough to find an angel investor, you should also understand that their worth far exceeds a monetary value. Most have worked with numerous companies, and perhaps even with several in your own niche. This means that this isn't their first time around the block, and they've gained valuable experience along the way, which you, too, can learn from as you build your brand."
"Angel investors sometimes become quite more than just someone to help build capital. If you choose wisely, a venture investor can quite often serve as a mentor. And since they have a monetary interest in your company, they only hope for you to succeed. Therefore, it can become natural for them to provide you with information, as well as helpful advice, should you be open to it."
"Besides having financial resources, angel investors are often tapped into networks of talent and can provide resources to identify and recruit all levels of candidates. Most angel investors are entrepreneurs and have been involved extensively with at least one venture capital company, giving them both ownership and management experience, meaning that they have had to traverse the hiring process, gaining both experience and access to talent.
Whether it is in marketing, supply chain management, HR, or public relations, angel investors generally have a wealth of information, contacts, and invaluable experience identifying the proper individuals for each role. By using your angel investors’ experience and resources in hiring, you can better ensure you will be bringing in the highest quality candidates and your business’s success."
"One of the most important and value additive things our angel did for us early on was providing back-office support. Our angel investor had numerous seed investments, and to help these ventures grow, he had started a service company to provide back-office support to all his startup investment companies. For free, he provided us with bookkeeping services, HR support, and even attorney services when we needed to sign a new lease. In essence, we were able to outsource most of our mundane administrative tasks to his team so that we could focus on what mattered most - our business. From what I understand, not all angel investors provide this level of support for their seed companies. But if your potential investor does provide this level of service alongside their monetary investment, I can say from experience that it’s worth its weight in gold."
"We've done a friends and family round, plus Tony Hsieh, the founder of Zappos, invested in us along with the CEO of Reddit. Our investors have provided me with great examples of what it takes to make a business run well. These lessons about what makes a successful startup are priceless. I'm grateful for the insight they give me."
"For the last several years, GKD has been backed by a wonderful group of angel investors--both through formal angel groups and individual angels. The local network they provide for us amongst hospitals, scientists, and technical support is extremely important for the feedback and trials we must run as a new-er startup. Additionally, they provide significant hands-on mentorship, through our board, our advisory board, and through participation of their time in quarterly meetings and more."
"Tests- Some of our angels run large industrial companies (our initial target markets), and they have opened up their teams to trial and provide feedback on our app. This provided us with a familiar sandbox to test our product and our thesis in a low-risk way. We're converting those initial teams to annual subscriptions as we speak."