Hot from Mesh: Capturing Angels – How to raise angel financing for your startup

En-meshing Angels

Mesh was a standing-room-only event this year. The only complaint that I heard around the lunch tables was that it is really, really hard to choose an afternoon session because all the sessions were so good. I chose the angel investing presentation by Austin Hill, a Montreal-based serial entrepreneur and angel investor. One of the highlights of Austin’s talk was a discussion about who angel investors are. And, no, don’t look at the list of the richest people in Canada.

Typical angel investors in Canada invest $25K-$500K. The best angels, or “friendstors,” are people who are involved in the industry (e.g. VP of product marketing at Yahoo), who like you as a person (i.e. you would go out for beers anyway and if there were a problem you would want to call them first to discuss it), and who have made money as well as lost money. Beyond purely financial losses, angels risk their most precious assets: time and reputation. As such, for an angel to get involved there ought to be financial, personal and social reasons to participate.

Thus, the best way to get “warm” leads to an angel investor is to seek referrals from professionals (lawyers, professional services firms) and friends.

Austin also highlighted the following great resources for entrepreneurs seeking an angel investment:

  1. Angelsoft now has a platform for syndicating deals across many an gel groups, OPEN-deals
  2. VentureHacks
  3. National angel organization and Angel capital association

Keep in mind that the biggest risk of doing an angel deal is that potentially painful divorce. Therefore, it is really important to “paper” the deal in the right way and seek out a lawyer experienced in forming and funding start-up technology companies.

Happy angel hunting!