How Not to Approach Venture Capitalists
and Angel Investors
To become more effective in your search for venture capital
or angel capital, here are three rules to remember.
1. Investing is a local face-to-face game. There
are two reasons for this. First, investors like to know
who they are dealing with. This means that a series of
in-person meetings usually has to take place before they
start to warm up to the entrepreneur. Second, if something
starts going wrong at a company, the investor wants to
be able to drive to its office in under an hour for a
meeting with the person in charge.
2. Venture capitalists and angel investors specialize
by industries in which they have in-depth experience.
Once you find a local investor do some further research
through their website or with a telephone call to see
if they invest in your type of project.
3. Both venture capital firms and angel investors
have a preferred deal size. For some venture capital
firms the minimum investment size may be $2 million and
the maximum may be $5 million. Venture capital firms can
also be broken down into early stage and later stage investors
with the vast majority being in the latter group. This
means they do not invest in startups. For angel investors
the minimum may be $50,000 and the maximum may be $200,000.
That is really important to find out before you send an
In most cases, you can find the answers to all three
questions on the venture capital firm's website. With
a private investor you will have to ask him or people
who know him before proceeding with your pitch.