How to find and approach Angel investors when you have no substantial connection to them

Some companies spend six months trying to find investors. They knock on 1000 doors and finally, after six months, find some dentist in Cleveland to invest $50,000 on crappy terms. Then they discover when the $50,000 runs out that the dentist was not a good investor because he's not a part of the right networks, he can't make the right introductions, and the fact that he invested in you is not enough reason for the big VCs to invest.

Other companies spend 2 weeks. They knock on 10 doors and get 5 offers. They pick the best one, and end up with a first-rate investor who is so good at picking winners that the very fact that they invested makes everyone else want to invest, too.

The difference? It's just a question of how "ripe" or ready the company is to begin the VC journey.

You already know what investors look for. Team quality, idea quality, traction, etc. Do you have these things?

If you're having trouble reaching or finding investors, it's a sign that you're not ready yet.

If you're finding it to be hard to raise money, it's a sign that you're just not ready yet. Your personal network may not be big enough. Your team may be young and inexperienced or just not be that well known in the tech community. Your idea may not be good enough, you may not have proven enough about your idea ... whatever the case is... if it's hard to raise money, that's because you're overreaching.

On the other hand,

• if you have an experienced team, they'll already know angels and VCs
• if you have a fast growing product, it'll be on everyone's radar and the angels will be calling YOU
• if you have a brilliant idea and a young but smart team, you can get into TechStars or Y-Combinator or one of the zillions of clones

If you don't have any of those things yet, you're just not ready to raise money. You can fight and hustle and go to every conference and comment on avc.com and every other VC's blog and ask investors for advice and ask advisors for investments and follow just about every other advice you've ever heard about hustling, and, YES, you will, EVENTUALLY, after SIX MONTHS OF NONSTOP BEGGING, find SOME investor to toss you a crappy investment at a poor valuation and then drive your company into the ground through sheer ineptitude, but that is not the path to greatness. The path to greatness is having such a great team, such a great idea, and such great growth that every door is already open to you and you can pick the perfect investor for your situation.

Until then, if it's not easy to raise money, stop worrying about raising money. Assume that it's a bad idea. Pick a different path.

Find angels or VCs with blogs. Read their blogs daily and comment intelligent questions or comments. They will eventually start to recognize you and reply back. Eventually you can mention your idea. Its a slow but solid method. Plus its not fake or cheap. It is sincere.

First off @Aaron, you are absolutely right it is a needle in the haystack, and as I am sure you have noticed now the haystack that is AngelList is fairly big and may not contain any needles.

That said I must admit it is getting tiresome to read responses like Joel’s “If you're having trouble reaching or finding investors, it's a sign that you're not ready yet.” on EVERY entrepreneur / startup site on the web. It is the de facto comment from “experts” and I am starting to think that maybe it has something to do with their own shortcomings.

Let’s look at why I think the comment is so wrong :

1) “If you have an experienced team, they'll already know angels and VCs.”

I am seriously experienced and have made great software in various companies including several startups (not started by me). So I should already know Angels and VC’s, but I don’t. Why? Because I admit I suck at networking. I was paid to work and that’s what I did. When everyone else runs around chitchatting I worked to make sure we actually had a product to launch.

2) “If you have a fast growing product, it'll be on everyone's radar and the angels will be calling YOU”

Not all startups are clones of Twitter and can be started by a 15-year-old in a basement, where the business plan is something on Mars and revenue is something we come up with later. Some entrepreneurs actually take the time to make a business plan and create something more substantial to society than the next Twitter/Facebook/place-something-here app. Those kind of startups need capital to get traction. The type of capital can sometimes be small enough that you can bootstrap or get family/friends/fools to help. However often it takes more than that and so you will need an Angel or VC to get beyond the prototype.

3) “If you have a brilliant idea and a young but smart team, you can get into TechStars or Y-Combinator or one of the zillions of clones”

As with number 2 some companies are beyond the college days and need more than 25k to get traction. The mentoring going on here can be very helpful but again most of these incubated startups are dealing with ideas that are all about creating a buzz about something that is barely anything.

It may seem I trash entrepreneurs working on the next big “x” but I am really not. Nor am I going after Joel as a person as I am sure he is experienced within his field. I am merely trying to highlight that there are other startups out there that are assumed to be a waste of effort because they are not part of the “fad” and actually require some capital to get going.

Imagine if the first car was only created after a 1000 people signed up to see a picture of it. I am pretty sure we would still be walking then!

Traction is currency. Do you have an active beta with users? Have you had any press / blog coverage? If you really mean angel investing and not seed I suspect you'll need at least that much to get an audience.

Create a great product, get users and demonstrate traction. You should be able to get something up in the wild on almost no budget. If you aren't a developer, you should be able to recruit some talent to build it for you on equity.

Advice on Angel.co - Demonstrate traction and an understanding of your business. They like to see graphs that go up and to the right too I've noticed. Try also to network with the Angel investors in your city in person. You should be able to figure out which events they are going to and meet them, and then you can add them to your profile on AngelList.

Needle in a haystack is the term I hear thrown around for PLENTY of angel network websites, however, I have had nothing but success from the New York Investment Network.

I wrote a review on it here and if you'd like to read through it, maybe this could be a great fit for you?

I was able to find an investor within a day, and had a signed agreement to invest capital within 2 weeks.

I have a theory that if you have no "connections" on AngelList and create a start-up profile, the only thing you can do is drive traffic to AngelList and not much more. I suggested to run an experiment and posted here.

I agree that if you are able to rake up some amazing data that will eventually help your chances, however, if you remain invisible to people that you are trying to impress with your numbers -- you're just wasting your time.