The role of an angel investor

An angel investor is like an advisor who’s willing to put their money where their mouth is: they want the startup to succeed because they have skin in the game. For founders, finding an angel can be a great source of both funding and mentorship.

I recommend picking angels who either are former founders/ operators, or are people in your industry who can answer industry-specific questions, make connections to customers, or enhance the brand through public image.

In essence, you have to take money from angel investors whom you would ideally want as advisors or employees or board members. By giving them an opportunity to invest a small amount, you are strengthening the relationship and putting their money to work.

Sometimes, you can allocate a small part of your funding round to these individual investors. For example, if you are raising a $ 2.5 million seed round, it would be a great strategy to put aside $ 100,000 to $ 200,000 for five to ten individuals who can help you with connections, industry knowledge, and be your brand ambassadors.