Top 16 How To Write A Letter To Angel Investors All Answers

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Letters to investors should be personally signed, or stamped with a signature. A letter to investors should always be informative, as well as professional. In order to keep investor relations strong, always communicate clearly and honestly about the details of your business.But what is a fair percentage for an investor? When it comes to angel investors, the general rule is to offer approximately 20-25% of your business earnings.

How do I write an email to an angel investor?

How do I write a letter to an investor?

Letters to investors should be personally signed, or stamped with a signature. A letter to investors should always be informative, as well as professional. In order to keep investor relations strong, always communicate clearly and honestly about the details of your business.

How do I connect to angel investors?

What is a fair percentage for an angel investor?

But what is a fair percentage for an investor? When it comes to angel investors, the general rule is to offer approximately 20-25% of your business earnings.

How do you ask an investor for money?

How do you cold email angel investors?

What do you say to a potential investor?

How do I write a letter to a potential investor for a startup?

How do you start a conversation with an investor?

When should you approach angel investors?

What are angel investors looking for?

A Solid Business Plan: Angel investors want to see a business plan that’s both convincing and complete, including financial projections, detailed marketing plans, and specifics about a target market. They want to see a developed vision that includes details of how to grow the business and remain competitive.

Do angel investors get paid back?

The Pros and Cons of Angel Investors

Having an angel investor means your business doesn’t have to repay the funds because you’re giving ownership shares in exchange for money. Angel investing is usually reserved for established businesses beyond the startup phase.

What return do angel investors expect?

In general, angel investors expect to get their money back within 5 to 7 years with an annualized internal rate of return (“IRR”) of 20% to 40%. Venture capital funds strive for the higher end of this range or more.

Do angel investors take equity?

Angel investors typically want ownership in the company they invest in. An angel investor usually provides capital in exchange for equity (stock in the company) or convertible debt, which is a loan that can be converted to equity at a later date.

How do you send an email to a venture capitalist?

How do I reach out to investors?

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How To Pitch Angel Investors | The Angel Investor Series | Secure Funding With NO Sales History

How To Pitch Angel Investors | The Angel Investor Series | Secure Funding With NO Sales History

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how to write a letter to angel investors

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how to write a letter to angel investors Archives – ALCOR FUND

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• Summary of article content: Articles about how to write a letter to angel investors Archives – ALCOR FUND Finding the perfect words that will ensure investors open your email is not easy. And we have all been there, struggling to increase our open rates. …
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• Summary of article content: Articles about Error 403 (Forbidden) In such a case, you have to focus on the subject line in the first place. · Now write a single line introduction about you and your role in the startup. · Write … …
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How to Write Investor Emails That Get a Response – Finmark

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Get Funded

The Ideal Framework For Writing Investor Emails

The Perfect Investor Email Template To Steal

Tips For Improving Your Email Response Rate

Ready to Make Your Investor Emails Less Cold

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How do I Write a Letter to Investors? (with pictures)

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8 Ways to Find The Perfect Angel Investor – Finmark

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Get Funded

What Is An Angel Investor

8 Ways To Find Angel Investors

What Should You Look For In An Angel Investor

4 Tips To Determine If An Angel Investor Is The Right For You

How To Track Your Angel Investor Interactions

Finding Your Angel Investor

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What Is A Fair Percentage For An Investor? — James Griffin Cole

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How Much Money Do You Need To Raise

What Is The Best Way To Calculate Returns

Calculate The Value Of Your Business

What’s A Fair Percentage For The Investor

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How To Get Startup Money For A Business

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Sample Cover Letter to Seek Financing | ZenBusiness Inc.

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Sample Cover Letter For Angel Investors | PDF

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Sample Cover Letter for Potential Angel Investors and Venture Capitalists – Bright Hub

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Introducing Your Company to Angel Investors and Venture Capitalists

Confidentiality Agreements and Funding Requirements

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how to write a letter to angel investors

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Reference / Recommendation Letter for Funding Application – Reference Letter to Angel Investor
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How to Write Investor Emails That Get a Response

As a startup founder, how many emails do you get every month?

200? 500? 1,000? Things are getting pretty hard to manage at that point, right?

Now consider the average investor, who might receive thousands of emails every single month.

Take White Star Capital’s Christian Hernandez, for example, who received over 5,000 emails in a regular month, over 1000 of which were from unique senders.

That means for every email you send to a potential investor, you’re competing with at least 1,000 others in that same month.

As you can imagine, such investors probably aren’t responding (or even opening) all of these emails.

So how can you expect to get a response from the VCs and angel investors you’re hoping to talk with?

In this article, we’ll provide the perfect five-step framework for writing concise, impactful investor emails that get read and responded to.

We’ll also throw in a simple email template to get you off the ground quickly.

The Ideal Framework For Writing Investor Emails

1. Make It Incredibly Clear What Your Startup Does

The first lesson is this:

Don’t waste any time.

Remember, the person you’re emailing might get hundreds of these same emails this week alone, so they don’t have any time to spare.

After introducing yourself (“Hi, I’m James from Such&Such company”), get straight into what it is your company does.

Don’t fluff this up with fancy startup jargon like “disrupting the market”, just say what it is that you do.

If you’re building a platform that helps users buy, sell, and trade NFTs, say just that, not “We’re helping the next generation of investors build a portfolio of virtual collectibles.”

Make it clear, and concise, and then describe the problem that exists in the market, and how you solve it:

2. Sell The Dream

This is the part most startup founders love.

We all have a huge vision for our product and company, and we want to scream it from the rooftops.

Be careful to keep this section of your investor email concise, and ensure it follows the statement of what you do (rather than proceeding it).

Explain as briefly as possible:

What your goal is for the company

Any initial traction you have for the product

The total addressable market you have identified

For example:

3. Tell The Investor What You’re Looking For

In your third sentence, you should describe to the investor you’re emailing exactly what it is you’re looking for.

Obviously, your end goal is to raise a pre-seed or seed funding round, but your email should be more focused on the next step.

What do you see as the next step here? Do you want to set up a discovery call with the investor? A pitch meeting? Perhaps you’d like to just start a conversation via email, and you have a specific product-related question (“Should we build X or Y next?”)

Some investors, like Michael Seibel from YCombinator, prefer this approach.

Starting a conversation in this manner would look something like this:

“We’re working on our MVP and are wondering whether we should prioritize building auction or classified listings?”

Other investors prefer a more direct approach. They know that the end goal is to get on a phone call or meet for coffee, discuss your startup, and kickstart the funding process.

A call-to-action for this type of investor would look like this:

In either case, be sure to be specific in what you’re asking for. Statements like “Would love your thoughts on this idea” are too broad, and are unlikely to receive a response, according to Sriram Krishnan, general partner at investment firm Andreessen Horowitz.

4. Explain Why You’re A Good Fit For The Investor

Investors want to know that you’ve done your research and that you’re emailing them because you believe their firm’s interests and your’s are aligned, not because you’ve emailed every VC in town to try and raise some money.

Before you send your email, do some research on the investor and their firm (if they’re a venture capitalist), and look to identify:

Recent investments they’ve made

Any requirements they advertise (such as tech-only or sustainable ventures)

Typical funding amounts

Then, explain why you believe you and the investor are a good fit to work together:

5. Attach Your Pitch Deck

Lastly, it may be helpful to the investor if you attach your pitch deck to the email.

This allows your investor to find more details about your product, traction, market research, and company vision, but allows you to keep your email short and sweet.

Leave this as a sign-off sentence in your investor email:

“I’ve attached a copy of our pitch deck if you require more details.”

The Perfect Investor Email Template To Steal

Hi [investor first name],

My name is [your name] and I’m building [product name], a [product category] that [what your product does].

[Target audience] struggles with [audience pain point], and [product name] helps solve this problem by [how your product solves pain point].

We’re [your goal] and I’d like to [what you want to do next].

We’d love to work with [investment firm name] because [how you fit their investment profile].

I’ve attached a copy of our pitch deck if you require more details.

Thanks in advance for your time,

[your name]

Here’s what this would look like in real life:

Hi Brian,

My name is James and I’m building NFTStation, a trading platform that connects buyers and sellers of non-fungible tokens.

New entrants to the NFT market struggle to find a platform that makes buying and selling easy for the layman. We gamify the trading process to make buying and selling NFTs approachable and more convenient.”

We’re raising a pre-seed funding round and we’d love to schedule a quick call to discuss this opportunity with you.

We’d love to work with XYZ Investment Firm because we fit a similar profile to companies you’ve invested in previously (sustainable, future-focused tech startups).

I’ve attached a copy of our pitch deck if you require more details.

Thanks in advance for your time,

James

Tips For Improving Your Email Response Rate

Use Your Company Email

One of the mistakes Michael Seibel says reduces his likelihood of replying to a cold email is not using your @company.com email.

Even if you don’t have a live website built yet, you should still own the domain and have a company email set up.

Sending investor emails from this address shows a level of professionalism and demonstrates that you’re serious about the venture.

Emails sent from a personal address may leave investors thinking, “Is this company actually legit?”

Watch Out For Spam Filters

One of the biggest reasons founders don’t receive responses is because their emails get trapped by spam filters.

Spam filters are designed to identify potentially malicious emails and block them from reaching your investor’s inbox, and they mostly do this by filtering for specific words and phrases.

There are a ton of words you should avoid, but the most common that apply to investor emails are:

Buy

As seen on

New you

Double your

Earn $

Cash

Pre-approved

Personalize Your Email

Studies show that emails with personalized subject lines get opened 26% more often, and receive 83% more responses.

Put simply:

Don’t blast all of your potential investors with the same email.

Make sure to address them by name (just use their first name as it appears more natural and less like a mail merge), and personalize your reason for contacting them based on the VC or angel investor’s typical funding requirements.

Make Your Subject Line Obvious

Don’t try and get too creative with your subject lines, and certainly don’t send emails with headers like:

“A great opportunity for you.”

Look, investors invest in startups. They expect to hear from startup founders who are looking for funding. That’s how the whole thing works. So just be straight up about it:

“Introduction – Tech Startup Seeking Pre-Seed Funding”

Look For A Way To Stand Out

Always keep in the back of your mind the fact that investors get tons of these emails a day, from companies that are probably just as promising as yours.

Part of what’s going to get you a response is being concise, respectful, and upfront with the appropriate information (essentially, following the framework we’ve discussed above).

However, you can boost your chances by finding a quick personal connection with the investor.

For example, if during your research on the VC you’re emailing, you’ve identified that they’re a fan of the Texas Longhorns, see if they’re playing this weekend.

Then, simply sign-off your email with something like:

“Good luck with the Longhorns game this weekend!”

Ready to Make Your Investor Emails Less Cold?

Sending cold emails to potential investors is an important first step in the funding process.

But it’s not all over and done there.

Once you get a response, you’ll need to nurture the conversations, track communications in your investor pipeline, and eventually meet with the investor to pitch your startup and secure a funding commitment.

For more info on pitching investors, check out our guide: How to Pitch Investors: 14 Tips to Get Your Startup Funded.

How do I Write a Letter to Investors? (with pictures)

A letter to investors should always be informative, as well as professional. In order to keep investor relations strong, always communicate clearly and honestly about the details of your business. Your correspondence with investors should only include factual information and each investor should be notified of important issues affecting her or his investment as soon as they become known. If attaching investor reports with a letter, elaborate on any areas of concern that a report may display and encourage investors to contact you directly if any should have future questions or concerns.

Whenever you write a letter to investors, make sure it is typed on letterhead with an easy-to-read, professional-looking font. Whether you are preparing a quarterly letter to investors, a yearly letter to investors or writing a letter for an investor proposal, be sure to keep a copy of the letter for your files and send a copy of the same letter to all of your investors, as well as any board members and other appropriate parties. Address the recipients in a respectful and professional tone, and always include your contact information.

All investor communications should be appropriately dated directly on the correspondence in order to keep a factual time line of communication. You should also always contain a reference or subject line after the letter’s date so your investors know what the letter is pertaining to and so the information is easily retrievable if needed in the future. A letter to investors should also always begin with a respectful and professional salutation even if you have a personal relationship with your investors.

When drafting a letter to send to investors, it is always a good idea to get directly to the point as soon as possible. You may have a friendly relationship with the investor, but discussing personal matters is never appropriate when providing a professional letter to investors. Instead, the letter should only contain information pertinent to the investor’s business interest and investment in your project.

In your letter to investors be optimistic about the future of your business together. Even if investors are facing the possibility of losing an investment, detail your best strategies for attempting to avoid such a loss. In short, assure your investors that you are doing your personal and professional best to protect their interests.

When a letter to investors delivers discouraging news, it is also a good practice to inform your investors of situations seemingly beyond your control. At the same time, however, make investors aware of the efforts you have made on their behalf. Most investors understand risks and understand that unforeseen circumstances can result in a loss. What most will not tolerate, however, is being misinformed or intentionally lied to in a letter or in person.

8 Ways to Find The Perfect Angel Investor

Thinking of getting angel investors, but not sure where to start?

Where should you look? What questions should you ask them? How can you tell a good investor from a bad one?

In this guide, we’ll explain everything you need to know about finding and choosing the perfect angel investor for your startup.

Table of contents:

What Is An Angel Investor?

Angel investors are individuals who invest in entrepreneurial ventures like startups using their own capital in exchange for equity. They often provide the startup founders with capital for their business, but they do not have any operational voting rights in the company.

Angels can come from different backgrounds, such as venture capitalists, corporate investors, wealthy individuals, and members of angel networks. They typically operate as individuals but it is not uncommon for multiple angels to partner together to form a syndicate when making investments.

An angel investor usually has experience in business or entrepreneurship because they can act as an advisor to the founders of the startup they are investing in. This can be a major help for first-time founders trying to grow a business.

There have never been more available resources to find and connect with potential angels. With the world being as connected as it is, we have listed some of the best ways to find angel investors below.

8 Ways To Find Angel Investors

Once you’ve decided that you want to bring angel investors on board, the next step is to find them. If you aren’t already connected to a network of startup investors or wealthy people in general, you might not even know where to start.

But not to worry! Here are eight places to find angel investors for your startup.

1. AngelList

AngelList is a popular website where startups can go to hire as well as look for investors to partner with for funding. It primarily aims to serve tech startups and works well as a reliable tool with excellent reach in the industry.

You can build a personal profile along with a company profile to get listed in the directory. This will help your startup gain some exposure and be in the right place to look for investors and allow angels to look for you too.

2. Angel Capital Association

The Angel Capital Association is a group of accredited angel investors with entrepreneurial experience and high net-worths to help lead early seed angel investment rounds. Getting involved with ACA is simple and they provide direct access to a full directory of potential investors.

There are over 14,000 angel investors and it is a tight-knit community that makes networking even easier for future partnerships.

3. Gust

Gust is another reliable angel investor network with a directory of thousands of different startups and accredited investors. These directories help make the vetting process quicker because these investors are already highly qualified to be listed. However, you should still do your own research before working with any investors.

You can also work directly with Gust and they will assist with determining your best course of action for funding.

4. Angel Forum

Angel Forum is a company that connects startups and investors by building a community to help fund angel rounds. All investors are seasoned professionals with years of experience, so you will not be getting involved with any inexperienced angels by using this resource.

Angel Forum operates in both Canada and the United States so they have a wide-reaching network available to your startup.

5. Angel Investment Network

The Angel Investment Network is a US-based platform helping to bring startups and angel investors closer together. You have access to investors worldwide with exactly 285,542 angel investors available to connect in their directory.

After registering you can build a pitch within the platform and publish it live on the site for investors to see. Investors can find your pitch and contact you directly to eliminate the amount of outreach you need to do. This is a great supplementary option to extend your reach.

6. Social Media

You don’t only have to stick to investor-specific platforms to find angel investors. Social media can be a great place to connect with your next investor. Twitter in particular has become a hotbed for connecting startup founders with angel investors.

To find investors on social media, start by being vocal about what you’re building. Talk about the journey of building your startup and document what’s going on. That’ll build an audience and make it much easier to connect with investors. In some cases, they’ll reach out to you first.

7. Networking Events

If you prefer to connect in-person, there is no better way to get involved and meet potential angel investors for your startup than networking events. You should look around in your local community and nearby cities that host big events and grow your network.

8. Friends & Family

An option that has been used so many times in the past to get some famous startups off the ground is the friends and family option. If you are building something you believe in, there is no better way to tap into your network than to seek investment from the people closest to you.

Of course, you need to be aware that getting investments from family and friends can sometimes complicate the relationship if your startup doesn’t go as planned. Only take an investment from friends and family if you’re ok with the potential consequences.

What Should You Look For In An Angel Investor?

Not all prospective angel investors will be the right fit for you. It’s important to consider what you value most and what you hope to build with this investor. Using the factors below to find high-quality investors that can help make a difference in scaling your startup.

Industry Experience

When looking for angels, it’s best to start with those who have specific experience in your industry. So if you are a tech startup, it would be best to start with investors who have previous tech experience rather than reaching out to healthcare investors.

Not only will they be more interested in investing, but in the future, they could act as a great advisor too because of their previous experiences working with similar startups.

Investing Experience

The next factor to consider is investing experience. As a first-time founder, it is best to get involved with an angel who has plenty of prior experience rather than a first-time investor.

You can even take it a step further and look for an accredited investor too. However, accreditation does not need to be the determining factor. Instead, look at their prior investments and research how they panned out to help you determine what is best for you.

Financial Stability

When you are getting involved with an angel investor, they should be high net-worth individuals that have no problem writing you a check for a specific amount. And you want to ensure they can invest this money without any potential issues in the future.

For example, you want to be sure your angel is not investing money with you that they will need in the near future. This puts unnecessary stress on the startup and is not worth getting involved in for any founder.

Mentorship Ability

As a founder, it can be difficult to navigate the difficult world of startups and fundraising pre-seed and seed rounds for your business. With an angel investor, they can also act as an advisor to you and help you in times of need.

If you want someone willing to serve as an advisor, this is another factor to add to your vetting criteria because not all investors will want to do so. But when you find the right one, it can change the way you approach business knowing you have a talented mind you can fall back on.

4 Tips To Determine If An Angel Investor Is The Right For You

After you’ve made some connections and determined some potential angel investor fits for your startup, it is time to figure out exactly which investor is the best choice for you.

1. Get References

Some startups like to only work with accredited investors to be sure they are getting involved with someone who has previous investment experience. However, whether you choose an individual or accredited investor, you should always check with references and follow up with previous investments they made.

By conducting some research and learning about their past investments firsthand, you can find out how they approach the process and what they will be like as your partner moving forward.

Expect to spend anywhere between 3-6 months finding potential investors so the more thorough you can be the better.

2. Align Goals With Your Investor

Once you find a few potential investors, it is best to talk about goals that you both have to see how close you are aligned on the future. This includes the amount of money needed, equity, investment time frame, and decision-making control.

By establishing goals, you can remove the risk of confusion down the road. The goal is always to grow a startup with a potential exit point for the angel, but by determining these goals at the start you can build a better working relationship.

3. Establish a Relationship

After discussing your goals, you can also start to build a relationship with your angel and determine how involved they will be with the startup.

Some angels want to be involved and act as an advisor based on previous entrepreneurial experience to help founders during times of need. However, some angels would prefer to simply invest and act as a silent partner.

You should discuss whether your angel will be working with your startup as an advisor or silent partner to best build that future working relationship together.

4. Treat It as an Interview Process

It’s important to operate with patience and treat each call as an interview process. Put value in what you and your startup do and only work with investors who can buy into your vision and work with you in scaling that vision into reality.

This means you should take notes during calls, go into every interaction with questions prepared, and do plenty of research on your prospect before meeting with them.

How To Track Your Angel Investor Interactions

When doing outreach to angel investors, you should treat the process like sales. This means that all leads should be tracked, interactions should be recorded, and your pipeline should always be full.

We recommend every founder going through the fundraising process to create an investor pipeline to properly track all of this information. You can start putting leads into your funnel using the resources we mentioned in this guide.

But when it comes time to track your conversations with angels, you will need to take it a step further with a pipeline. We either recommend using a spreadsheet, a CRM, or both to start building one.

To fill your pipeline, consider a few things like investor location, funding amount, and industry experience when looking for leads. You can save time by niching down your search and looking for investors that have previous experience investing in startups like yours.

This will help to track your investor interactions and make the process even easier. You can even look at competitors or similar startups who previously raised money for some inspiration.

We also recommend starting and working your way up to bigger names as you start to build experience and have the chance to test your process. Label investors as low priority and high priority to filter your pipeline even more for accuracy.

After the first few calls, you can gather a lot of information about the types of questions they will ask you and what information they value most. This allows you to track everything in your pipeline and prepare for the next call a little differently.

Finding Your Angel Investor

Going through the process of raising capital is a stressful one, especially for first-time founders with no prior experience in this area. Vetting potential angels and building your network is a high-value but time-consuming task.

Finmark is a financial planning tool to help startups manage financials and create more accurate financial projections and forecasts. You can Sign up for a free 30-day trial today!

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