Six Types of Angel Investors and How to Engage with Them on LinkedIn

guides May 22, 2023

As a founder of an early-stage startup, unlocking funding and advisory support from angel investors can be a critical component of your growth strategy. These angels, however, are not a homogenous group; they come with distinct investment styles, goals, typical investment amounts, and decision-making processes. Understanding these differences is crucial when reaching out to angel investors, especially on professional networking platforms like LinkedIn.

This guide will offer a deep dive into the six primary categories of angel investors, their typical decision-making processes, investment stages and amounts, their general approachability, and tips for identifying and connecting with them on LinkedIn. The six types we will explore are:

  1. Solo Angel Investors
  2. Hidden Angel Investors
  3. Inactive 'Angel Investors'
  4. Angels Operating in Investment Groups
  5. Angels as Venture Partners in VC Funds
  6. Angels Spearheading Syndicates

Solo, Active Angel Investors

These angel investors operate independently and are usually experienced in the startup world, with a track record of successful investments. If you reach out to them, they may agree to a meeting to understand your business plan and vision, evaluate your startup's financials, conduct market research, and assess your team's capabilities. As they are individual investors, they have the autonomy to make quick investment decisions, sometimes within days or weeks. They tend to invest in early-stage startups, and while the investment amount varies widely, it is generally smaller than other types of angels. On LinkedIn, these investors can be identified by searching for keywords like 'Angel Investor', 'Private Investor', or 'Independent Investor' in their profiles.

Hidden Angel Investors

These are wealthy executives or successful startup founders who do not publicly identify as angel investors. They possess significant industry expertise and funding capacity, often investing in later seed and Series A rounds, with investment amounts depending on their financial capacity. Identifying these hidden angels on LinkedIn can be difficult and requires a keen eye for high-ranking executives or successful entrepreneurs demonstrating an interest in startups or technological innovations. Attempting to reach out to them may therefore result in a higher rate of rejections.

Inactive Angel Investors (and How to Avoid Them)

This group of individuals bears the title 'Angel Investors' but they're not as active as they might seem. We can further break them down into two subsets:

  1. “Dormant” Angels: These are individuals who may have invested in startups in the past but are currently inactive. Their investment history could be minimal, sometimes only a single investment. They maintain the title 'Angel Investor' on their LinkedIn profiles more for prestige or personal satisfaction than as a reflection of their current investment activity. To identify them on LinkedIn, check for a lack of ongoing investment activity. If their profile mentions a singular investment without any recent follow-up, they could fall into this category.
  2. “Masquerading” Angels: This category of 'investors' portray themselves as active angel investors, but in reality, they may be more interested in selling their services or advice to startups. It's not uncommon for angel investors to offer consulting services as a part of their professional repertoire, but masquerading angels rarely, if ever, intend to invest from the outset. They often exaggerate their investment experience to lure unsuspecting founders. To identify such individuals, look beyond their 'Angel Investor' title. Review their work experience, job titles, and professional achievements for inconsistencies. If their primary roles are consultative or advisory, or if their portfolio does not support their investment claims, be cautious as they might be masquerading angels.

 

Angels Operating in Investment Groups

These angel investors form part of organized groups that pool their resources and expertise to invest in startups. If you approach such an investor, they may introduce you to the group's decision-makers who will carry out due diligence on your startup. The decision-making process can take several months due to the group's size and the complexity of the deal. Investment groups typically invest in the seed or early stages of a startup, and the check sizes can vary widely. You can find these investors on LinkedIn through their association with known angel investment groups listed in their profiles, and specifically by filtering for “angel group” or “angels” in their current company name when searching on LinkedIn or Sales Navigator.

As a general rule, it is effective to connect with angels whose interest in startups and angel investments is solely displayed in their connection to an angel group. In most cases, they do not have any real influence on the decision process of the angel group, and all they will offer is to introduce you to someone operating the group, or even just to the group’s website. In addition, angel groups, in many cases, do not offer significant value beyond the value offered by VC firms, and don’t have a much faster or easier decision process to give them any real allure for startup founders. 

Angels as Venture Partners in VC Funds

These angel investors are associated with venture capital firms, often in the role of venture partner. They help the VC fund source deals, evaluate startups, and provide mentorship to portfolio companies. Some of these angels can also invest privately, on their own, but usually, they will prefer to bring the startup to the venture capital firm they are associated with. That means the decision-making process is similar to traditional VC investments, as is the typical investment amount.
On LinkedIn, these individuals can be identified through their association with VC firms and their designation as venture partners under “current job titles.”

Angels Spearheading Syndicates

Syndicate lead investors are responsible for sourcing deals, negotiating terms, and rallying other investors to participate. If approached, they may conduct due diligence on your startup, review financials, and negotiate terms. Once they have made a decision, they will present the opportunity to the other investors in the syndicate. Depending on the syndicate's size and the deal's complexity, this process can take several weeks or even months. These angels typically lead investments in the seed and early stages, with check sizes similar to angel groups. On LinkedIn, these individuals can be found by combining the word “syndicate” in the search, either under “company name” or in the boolean search.

Navigating Your Angel Investment Journey: Key Insights

Embarking on your fundraising journey, it's important to discern the types of angel investors that are most accessible and approachable. From our analysis, the leaders of syndicates offer the most value for early-stage investors, as they combine the ability to take relatively fast decisions with a larger cheque size than an individual angel. Solo angel investors are also an excellent group of investors for startups, especially in the pre-seed, seed, and late-seed stages. They are relatively accessible, and beyond their ability to decide on an investment independently, they often can offer valuable insights and connections. Finally, angles that serve as venture partners are very useful contacts for early-stage founders. While they might not always be open to investing privately they are excellent door openers for VCs, which might be crucial for your next round. 

Wrapping Up: The Angel Investor Landscape on LinkedIn

The world of angel investing is diverse and multifaceted, with different types of investors each bringing unique dynamics to the startup funding landscape. Understanding the nuances of these different types of angel investors - individual angels, angel group members, syndicate leaders, venture partners in VC funds, hidden angels, and inactive angel investors - is an essential part of the startup funding journey. This understanding allows founders to strategically navigate the investor landscape, approach the right investors, and secure funding in a more effective manner.

LinkedIn serves as a crucial tool in this process, facilitating discovery, connection, and interaction with a broad spectrum of angel investors. Remember, the right angel investor might just be a LinkedIn search away!

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