How to Find Angel Investors: A Guide for 2025

If you’re looking to start a business, you’ll need to find the capital to bring your vision to life. While there are various funding sources available—such as loans, crowdfunding, and venture capital firms—many entrepreneurs find that angel investors are the best fit for their needs. These high-net-worth individuals routinely provide financial backing and support for startups, usually in exchange for equity.

However, as their name suggests, angel investors aren’t always the easiest to find. This article offers valuable tips for identifying potential angel investors and highlights essential considerations to consider before approaching them to maximize your success. We'll also discuss how Wise Business can help you hold, send, and receive your funds across currencies at low cost.

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Table of contents
What are Angel Investors? Strategies for Approaching Angel Investors 5 ways to Find Angel Investors 1. Angel Investment Network 2. Startup Events and Pitch Competitions 3. Incubators and Accelerators 4. Networking 5. Social Media Frequently Asked Questions

What are Angel Investors?

Angel investors are wealthy individuals interested in promoting startups and other new businesses. Much like venture capital firms, they’re prepared to invest in your company in exchange for equity in the new venture. Many angel investors are experienced business professionals who aim to provide startups with the guidance and support they need to grow through their early stages.

It’s important to understand the benefits and drawbacks of working with angel investors before you approach them. On the plus side, these investors can usually offer large sums of money thanks to their high net worth and you won’t need to worry about interest payments or tight repayment schedules.

The personal touch deployed by many angel investors can be a benefit to your company as well. For example, you might seek someone experienced within your field or industry, as they can offer crucial advice to help you through the bumps in the road. These investors may also be able to introduce you to other high-net-worth investors and industry-specific mentors.

That said, working with an angel investor isn’t ideal for everyone. Their support and guidance comes at a cost—literally. When you offer equity to investors, you’re essentially selling a portion of your ownership in the business in exchange for capital. This means that as you bring in investors who acquire equity, your own ownership share is diluted or reduced.

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Strategies for Approaching Angel Investors

Before you approach anyone about investing in your business, you’ll want to have a clear idea of who they are and what they’re likely to expect. Not only is this crucial for protecting your own interests, but it’s also the best way to set yourself up for success. After all, it’s likely that you’ll only have one chance to impress a potential angel investor, and you’ll want to make the most of each and every opportunity you get.

The Pitch

Your first point of contact with a potential angel investor is known as the pitch. At this stage, you’ll be expected to provide the prospective angel with a comprehensive pitch deck outlining your startup’s story and strategy, financial projections, and a clear explanation of how you’ll use the Angel Investor’s funds. Your pitch may take place after meeting an investor at a pitch event or being introduced through a mutual contact.

It’s important to come to this meeting as prepared as possible. Be ready to discuss detailed financial metrics, your business model, your pricing strategy, and your plans for reaching customers. Investors will want to hear about relevant experience, investment milestones, and the overall competitive landscape.

Due Diligence

Angel investors who are interested in investing in your company will begin doing their due diligence on you, your company, its financials, and the overall market landscape. They’ll seek to verify your claims before investing any money in your venture.

You should also do the same. Before you pitch your idea to anyone, you should have a clear idea of who you’re talking to and why you want to talk to them in the first place. Look at how their specific skills and experience can help your company grow. Don’t be afraid to ask for an introduction to other founders they’ve invested in over the years. Get a sense of what they’re like to work with and whether they’re a right fit for you.

The Terms

So you’ve decided an Angel Investor is the right fit. Congratulations! If all goes well, you’ll meet with your angel to discuss the investment structure and the overall terms of your agreement. Hopefully, this will mark the beginning of a long and fruitful relationship with a key business partner.

Angels normally expect an equity stake in your company of between 5% to 25%⁽¹⁾. The amount will ultimately depend on the size of their investment and your company’s growth stage. At this point, you’ll also work out key details such as pro-rata rights to participate in future funding rounds and whether they’ll have a seat on the board.

The Future

Going forward, your angel will serve as a mentor and advisor to your company. If you’re lucky, you’ll be able to take advantage of their network to maximize your business success. For example, they might be able to introduce you to other partners and investors.

As you go through future rounds of funding, angels may choose to maintain their stake by exercising their pro-rata rights. Others might opt to sell some of their shares to new investors. Either way, they’ll play an important role in your company for years to come.

5 ways to Find Angel Investors

1. Angel Investment Network

High net-worth individuals who are interested in financially contributing to startups and other high-potential business can join groups designed for that exact purpose. These angel investment networking groups work together to evaluate investment opportunities, share insights, and pool their resources to make more substantial investments than individual angels might be able to afford alone. It’s a great way to connect with potential investors boasting a wide range of expertise.

Some potential angel investment groups include:

• Band of Angels
• Golden Seeds
• Tech Coast Angels
• New World Angels
• Houston Angel Network
• Alliance of Angels
• Central Texas Angel Network
• Hyde Park Angels

Be sure to search for state, regional, and industry-specific angel networks in your area as well. There are countless options across the United States for startups and early-stage businesses alike.

2. Startup Events and Pitch Competitions

Startup events are another way to connect with angel investors. You’ll find many of these events involve pitch competitions, where entrepreneurs are invited to present their business ideas directly to a panel of potential investors. If you win, you may get immediate capital, as well as a great deal of attention from other potential backers. If you lose, you’ll still have the chance to network with other interested individuals and get your ideas in front of a wider audience.

3. Incubators and Accelerators

Incubators are designed to nurture early-stage startups through a supportive environment for refining business and product ideas, while accelerators are more intensive programs meant to “accelerate” startup growth. Both connect budding entrepreneurs with key resources and mentorship from industry leaders. It’s also through their access to networks of industry leaders and decision makers that they’re able to make their biggest impact on startup founders seeking angel investors. Boost your business credibility and connect with potential investors through these robust programs.

4. Networking

You don’t need to be a part of an incubator or accelerator to network with potential angel investors. Take advantage of your connection with other startup founders and business professionals to get a sense of potential investors in your area. Others have navigated the same investment landscape and can provide key tips, guidance, and feedback. They may also be able to leverage their connections to introduce you to potential investors on their own.

5. Social Media

Today’s hyper-connected media landscape makes it easier than ever to connect with potential investors from the comfort of your own home. Don’t be afraid to use social media to your advantage. Platforms like LinkedIn and X (formerly known as Twitter) can introduce your business to a wider audience and build brand momentum. In addition, you can use these platforms to source angel investors, using their listed contact information to share your plans for maximum success.

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Frequently Asked Questions

How are Angel Investors Found?

Entrepreneurs seeking angel investors can find them through a variety of different means. The five main ways to find an angel investor include pitch events, angel network groups, incubators and accelerators, networking, and social media.

Pitch competitions are held with the explicit purpose of introducing startups to angel investors. At these events, entrepreneurs will pitch their idea in front of a panel of potential investors. The winner of the event receives funding, while additional participants are given the chance to network within their field.

Angel groups also connect entrepreneurs with angels. You’ll find state, region, and industry-specific groups of high net-worth individuals who work together to find high-potential startups to invest in.

Incubators and accelerators are programs designed to help early-stage businesses grow by providing them with resources and networking opportunities. While not explicitly designed for connecting founders with angel investors, they promise a chance to network within key communities.

Networking can also take place amongst other founders and professionals who have worked with angels in the past. Your network may be able to introduce you to potential angels themselves.

Social media allows entrepreneurs to connect with potential investors through a digital connection. Many angels leverage sites like LinkedIn to keep up with promising startups.

Learn More: How 409A Price Impacts Your Startup’s Stock Options

How much do you pay an angel investor?

Angel investors aren’t paid a salary in a traditional sense. Instead, they receive compensation primarily by receiving equity or convertible debt in exchange for providing capital to startups.

Usually, angels receive a minority ownership stake in the company. This tends to come in at 5% to 25%⁽¹⁾ equity, depending on the size of their investment. Angels may also receive a slightly larger stake in exchange for a seat on the board or taking on another advisory role in the company.

Unlike a loan, angels don’t expect the money back unless the business succeeds. If it does, they tend to see a high return on their investment. If an angel chooses to invest in your company, it’s a vote of confidence in your future success.

How Do I Reach out to an Angel Investor?

It’s critical to do your due diligence before reaching out to an angel investor. Get a sense of the companies in their portfolio and their past investments to see whether they’re a right fit for you. For example, it can be wise to search for an angel who’s experienced in your particular field or industry so they can provide you with critical guidance and support.

Not only does this research allow you to get a sense of whether the investor is the right fit, but it also enables you to personalize your pitch. This helps you establish a solid reputation with the angel from the moment you meet, as it shows them that you’ve done your research and understand the market. It’s an easy way to gain their confidence right from the start.

How Hard is it to Find an Angel Investor?

It’s not easy to find an angel investor—but that doesn’t mean it’s not worth a try.

Angels are often a flexible and patient source of capital for startups and other early-stage businesses. As a result, many founders seek them out as a means to help their company grow. Whether you choose to connect with an angel through a pitch competition, a networking group, or social media, expect to face high competition from your fellow founders. After all, they’re as passionate about seeing their business succeed as you are.

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Sources:

1. Angel investors | British Business Bank.)