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Writer's picturePhill Robinson

How to Prepare for an Angel Investment Round




Guidance Note for Members Looking for Angel or Early Stage Investments

 

Boardwave is a membership organisation crafted to empower software founders and CEOs across Europe with the tools they need to grow and scale their businesses. Our mission is to foster success through best practices, advice, guidance, and mentoring from peers, enabling our members to achieve their goals more swiftly and effectively than they could do on their own.

 

Joining Boardwave is free, ensuring that every member, whether bootstrapping a start-up or in the early stages of development, can access our resources without financial barriers. This inclusivity is made possible by our consortium of over 80 international partners, allowing us to currently support 1,500 members across Europe.

 

We maintain the group’s quality through minimum entry requirements, ensuring that all members meet our high standards and contribute to the collective expertise of our community. Our entry requirements will have a number of characteristics similar to those which an early stage external investor would want to see - ahead of making an investment decision.


So below are our entry requirements for becoming a Boardwave member. Please reflect on these and consider each requirement through the lens of an investor. You might want to focus on any weaknesses prior to discussing an investment round externally

 

Membership Application Evaluation Criteria


  1. Nomination: A cornerstone of our process. It indicates an existing Boardwave member or partner can vouch for the applicant’s leadership and business viability. This endorsement suggests the applicant meets our minimum requirements and is deeply committed to their business’s success. Direct nominations are a fundamental part of our admissions, and we rarely admit a member applicant without one (either as a direct member or partner recommendation).


  1. Business Substance: We verify the applicant's business through documentation, such as Companies House or "Crunchbase" checks, to ensure active trading or registration for at least six months. A visible online presence or website that clearly presents the business proposition and its solution to a problem is crucial. Stealth mode businesses do not qualify.


  1. Commitment: Founders must be fully committed to their venture, treating it as their primary occupation and future career. This commitment is assessed through profiles like LinkedIn to confirm the founder’s focus is not divided among multiple ventures or employment elsewhere.


  1. Evidence Of Proof of concept (PoC), Prototype, or Minimum Viable Product (MVP): A PoC does not need to be a finished article, but we do seek evidence of a product’s feasibility, ideally in the form of a demo or video showcasing the solution in action. This evidence should show proof of substantial research, indicating the applicant's capability to build a product that meets a market need. 

 

Additionally, prospective members should have undertaken:


  1. Comprehensive Market Research: Detailed analysis of the product market to validate the need for the business. This includes a thorough understanding of the Target Addressable Market (TAM), its size, and competitive dynamics.


  1. Creating A Business Plan: Having completed initial market research, founders should also have built a business plan, helping to understand the levels of investment that might be needed, and the “time to market” for the solution, as well as the revenue model and potential growth journey.

 

With these things in place, entrepreneurs should be at a stage where they may want to consider raising external investment, or perhaps venture capital to further fund R&D, to build the product and scale the business.

 

Membership of Boardwave is most beneficial for the entrepreneurs and businesses that meet these standards.

Guidance On Leveraging Boardwave Membership for Early-Stage Investment  


Seeking external investment is a pivotal moment for any founder and there are several ways Boardwave can help on this journey:

 

  • Networking and Mentorship: Immerse yourself in our community which is there to network, share ideas and best practice, and gain insights from peers. Over half of our members have also volunteered to be mentors, and engaging with members facing similar challenges or who have navigated them successfully in the past can provide invaluable advice at every stage of growth.  Most importantly raise your visibility and build a reputation.

Click Here To Connect With Members with businesses at £1m ARR or below

 

  • Insightful Events: Participate in our breakfast or dinner events and workshops focused on early-stage investment. These gatherings offer a platform to connect with experienced leaders and potential mentors who can provide guidance. Keep an eye on our Events Connect feature to register for upcoming events and explore past participant lists for people you might want to connect with for guidance.

Events Connect: Boardwave Events Connect

 

  • Understanding Investment Options: Explore the different types of capital that might suit your business, from angel investments and venture capital to bootstrapping or traditional financing. Knowledge of the investment landscape ensures you make informed decisions about your company’s funding strategy. We run curated Breakout Groups, of 6-8 like minded Founders each quarter, who get together to discuss their business and leadership challenges. Joining a Breakout group is a great way to learn from other leaders, in a trusted environment, who have raised external investments before, and can help you understand how you should prepare and how to think about it. We have intakes for the programme in March and October.

  Join a Breakout: Here


  • Investor Connections: Use our platform to discover members who are angel investors or have a venture capital background. In this way, Boardwave offers a direct link to individuals with the expertise and potentially, the interest in your venture.

Professional VC Background Members: Boardwave Venture Capital Professionals

 

  • Preparation and Timing: Give yourself ample time to navigate the complexities of external funding. Understanding the nuances, such as tax implications and the characteristics that make a business investable, is crucial. Proper preparation ensures your business is well-positioned for investment discussions and opportunities.

 

Boardwave is here to support your journey toward securing external investment, offering resources, connections, and expert guidance to ensure you approach this critical juncture with confidence and strategic insight.


Securing a Mentor with Investment Experience via Boardwave


Entering the realm of external capital raising for the first time presents a steep learning curve. While the internet offers a plethora of information, direct guidance from someone experienced in successful fundraising can be invaluable. 

 

Boardwave facilitates such mentorship through our Connection Centre, where you can search and filter to narrow down the perfect connections, both for one-time discussions and ongoing mentor relationships:

 




  • Diverse Expertise: Our platform hosts a variety of members who have navigated different paths to success, including bootstrapping, securing venture capital, floating, managing exits, and more. Utilise our filters to find mentors who align with your specific needs and can offer tailored advice on navigating the investment landscape.


 

  • Role-Based Searching: For targeted mentorship, our system allows searches by role, including members who are angel investors or those who are both a mentor and angel member, offering a unique perspective on the fundraising process.

 

  • Extended Network: Boardwave also connects you with external partners like Angel Acadame or Startupbootcamp, who can provide deeper insights and advice, further enriching your mentorship experience.

 

 

Boardwave’s Community of Angel investors

 

Amongst our 1500 Boardwave members we have identified 120+ leaders who are active Angel investors. Some are just beginning their investor journey, whilst others have a wealth of experience and have been investing for many years. 

 

The spectrum of investment strategies among our Angels is broad, reflecting varying levels of capital commitment, investment stages from pre-seed onwards, and interests across different sectors and verticals. While some may manage portfolios of 50-100 investments, others might focus on a select few, highlighting the unique approaches and motivations within our network, so it’s worth getting to know them to understand what their motivations are.


 

It’s important to remember Boardwave does not operate an Angel syndicate, nor do we make specific recommendations on investments to our members who are Angels.  Our role is to facilitate meaningful connections between members.

 



Helping Founders & Angels Connect

 

Boardwave’s Connection Centre makes it easy to connect to relevant Angel investors. There is a specific filter for “Angels”, alongside other member characteristics such as experience, industry background and skills. This feature allows founders to identify a small number of potential Angels that they see as a potential fit for their business. If so, they can make a “connection request” to those other members. If a member accepts the request, we will provide both parties with each other’s contact details, for them to have further dialogue independently and confidentially. The right mentor may be able to guide you on how to approach this process and phase of your business and have advice that is likely to make your possible investment round more successful.


 

Moreover, Boardwave fosters a community-oriented platform that includes specialised member groups. One such group is dedicated to "Early-Stage Investing," attracting members interested in or actively engaged in angel investing. This group serves as a forum for exchanging ideas, information, and resources, creating opportunities for founders to interact with peers and potential investors in a focused environment. Within the group it is possible to post group messages and make comments on posts. It is also possible to share documents, such as “teasers” and “pitch decks” at the right time.


 

 

What do Angel Investors Expect From Members Looking for Investment? 

 

Not all Angel investors are looking for the same thing. They will have varied expectations shaped by factors like investment stage, amount, who the other investors are and even the tax status associated with the investment. They may also look to invest in businesses where they can add more than just capital through their own domain expertise.

 

It's essential to understand that rejections are not solely about your business's value but also reflect the investor's specific interests and investment strategy. Learning from feedback, even when it leads to a 'no', is crucial. Patterns in feedback may indicate areas needing refinement. Angels primarily seek opportunities where they can significantly contribute, aligning with their investment philosophy and your venture's needs. Recognizing this can guide founders to better prepare and align their pitches to match with the right angel investors.

 

 

Further Advice for Founders Considering Angel Investment

 

Before seeking angel investment, assess your readiness and clarity on what you expect from investors and whether your business is ready for this next step. Boardwave’s criteria for joining mirror what angels typically seek in opportunities, offering a foundational checklist for preparedness.

 

It may be tempting to join the “Early-Stage Investing” member group and post your pitch deck, to get it in front of as many Angels as possible. Be thoughtful before doing this, to ensure you are ready. Use experts and mentors in the community to ensure you have covered the key items they will be interested in and get advice from someone who has done it before. 

 

Angels are often much more inclined to engage if you have a well thought through documentation and have already secured a lead Angel investor for the round, who has a decent track record. Founders may also find a more favourable response if that investor also approaches others in the group on your behalf. 

 

Securing an “anchor” investor in this way is almost like having a “reference”, someone reputable that is saying, “I have looked at this business and team in depth and have decided to make an investment”. If that’s not possible an alternative is to use a mentor or other software leader to act as a reference for you and your business, someone who has a good reputation who will say “I think this is a great business/team, they are worth considering”.

 

If you decide to share information about your funding round, and don’t get a great deal of response from the group, don’t assume that there’s no interest. It would still be worthwhile trying to engage the group later with updates on the progress of your business as you fill your funding round. If you can show good progress, there may well be interest a bit further into your process. It’s also an opportunity to learn, from a mentor or expert, why you didn’t get the response you hoped for. Address the area(s) of concern and try again.

 

Conclusion

 

The secret to success is preparation. With the right amount of planning, networking, and learning from others in the community you will significantly improve your chances of success. Through expert advice or mentoring, founders looking to raise external capital can ensure they build on the wisdom of the group and as such maximising the chance of successfully raising their first external funding round.


Good luck!




תגובה אחת


Andy McDonald
Andy McDonald
19 במרץ

Great insight, thanks for posting

לייק
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