Once you have written your proposal (and perhaps made a start on your more detailed documents), you are ready to launch your proposal to prospective investors.
Here’s a quick outline of the process:
Once you have clicked ‘Publish’, your proposal will be sent for approval by a member of the Angel Investment Network team. It will be approved if you have given sufficient info and they think your proposal is good enough. It will be rejected if it lacks detail and they want you to improve it before it is listed.
If it is rejected, don’t be disheartened, it just means that you need to make the suggested adjustments before clicking ‘Publish’ again. If you have improved it sufficiently then you will be approved. Part of the reason we have this process is to help entrepreneurs understand and reach a suitable standard with their proposal so that their listing is not a fruitless waste of time.
When your proposal is approved, it is then immediately live on the network and can be viewed and searched for by investors registered on the site. If you have paid for a Pro, Global Pro or Executive package you will get far greater exposure and will appear first to investors. Your proposal will also be sent in the corresponding mailouts for each package so that investors will receive information about your proposal in their email inboxes.
When an investor likes a proposal they will click an ‘I’m interested’ button which will notify you via the internal messaging system and via email. Once you have replied internally to their message of interest, you will then be given access to the contact details (i.e. phone and email) on their profile and are free to discuss your business with them however you and they wish.
As your listing time rolls on, you have two options, you can either passively wait for the investor interest to come; or we do provide means for you to be more active and targeted in your pursuit of investors. We call these ‘Nudges’
What are Nudges?
On most fundraising sites as an entrepreneur you put up your proposal and hope. You are able to post updates and share your pitch, but you can’t search for investors who you think would be interested and be a good fit for your business. There is no way for you to really optimise your fundraise with a targeted, informed and active approach to finding great investors.
On Angel Investment Network we wanted to help give entrepreneurs a bit more power. So we came up with nudges. When you search our investor database using keywords that you think will help find suitable investors for your business, if you have nudges enabled, you can then directly approach investors of your choosing. This way, you can almost make certain that the right investors are looking at your proposal (rather than merely hoping that they see it on the site or in a mailout).
For example, say you have a business that builds robotic limbs for people who have lost their, you might type ‘robotics’ and ‘medical’ as your keywords and the investors who come up will have either interest and/or experience in those areas.
You can then choose to nudge them.
Each time you choose to nudge an investor, they will receive an automated email saying that you have seen their profile and think they might be a great fit you’re your business. They will be linked directly to your proposal and given the opportunity to get in touch with you.
Nudges therefore allow a very targeted approach and have they added benefit of flattering nudged investors by reference to the fact that you have picked them to get in touch with out of all the investors on the network. Subtle and practical flattery of this kind can go a long way in fundraising!
Is there a good nudge strategy?
In some sense, it is problematic to try to create a strategy for nudging. There are so many variables at play that an infallible technique for nudging is an impossibility.
For instance, you may find an investor who has the right background, the perfect interests, an ability to invest a suitable amount – a perfect fit, but they still might not respond to your nudge.
The problem is that investors may not always be looking to invest – they may have just invested in a couple of companies and not be willing to look at more for the time being. It just goes to show that you have to manage your expectations with these things, if you are ignored, it’s not necessarily personal.
And you should take that same attitude into all of your fundraising not just when using nudges.
That said, it is not overly complicated to work out that there are obvious ways to increase your chances of getting responses to your nudges:
- The easiest way is to ensure that your proposal is as good as it possibly can be, enthused with excitement as well as being full of substantive and impressive detail
- Knowing which investors to look for – randomly selecting investors may yield results but it’s less likely. The more specific you can be in your searches, the higher chance they will get back to you
- Statistically the more nudges you send out the more responses you should get
If you combine these three ways, you should give yourself a good chance of beating the 10% average response rate on nudges.
If you think 10% sounds low, just consider that 20 nudges will yield on average 2 interested investors; and depending on how much you’re raising and how much the interested parties are willing to invest, it could be just 20 nudges that help you close your round!
You just need to realise how valuable each connection to an interested investor is to fully comprehend the value of this.
When you start receiving interest from investors then you need to know how to handle discussions and ultimately close investment. Information on this can be found in the next course iii. Closing your Round