Angel investors are highly beneficial for biotech startups who need access to early-stage funding.
Angel investors are individuals with a high net worth who have the ability to provide startups with capital in exchange for equity. While angel investors can choose to make investments in any fundraising round, they will typically provide choose the pre-seed or seed rounds of funding. This is because their investments tend to be in the tens to hundreds of thousands of dollars rather than millions, so investing early means they can get the largest percentage of equity for their money.
🔬 Learn about: Funding Options for Biotech Startups
Angel investors are highly beneficial for biotech startups who need access to funding in the early stages of growth. If you are focused on research and development to reach proof-of-concept, you might be too early for most venture capital firms. Angel investors, however, tend to understand these earliest steps in the forming of a company. After “friends and family” funding, angel investors are the next most accepting of risk in an investment. They are often retired executives who are interested in staying involved in the industry they worked in. By investing in startups, they can continue to put their experience to good use.
If you have decided to pursue angel funding, the next question is: Where do you find angel investors? One answer is, on angel investing websites. Since these are individuals making the investments, they don’t usually have a team of people to find interesting companies for them to put money into. Instead, angel investors often become members of networks that provide an online platform for startups to reach them, assist in due diligence, and help them syndicate their investments with other angels.
These angel network websites are a great place to look for investors. Keep in mind that each website and each angel has a distinct area of investment focus. Make sure to look specifically for angel investors who are interested in the biotech industry. Not only will you probably not get a response from other investors, it also makes you look like you didn’t do your research before sending your pitch. Investors talk to each other, as one of their most valuable methods of determining whether to invest is what the investors they trust think of your company. Plus, an investor who understands the biotech industry will not be surprised that it takes 5-10 years to see a return on their investment.
🔬 Learn: Where to Find Life Science Investors
Many of these investors and investor networks maintain blogs on their website and can be found on social media, which gives you the perfect opportunity to conduct some research before you pitch your company.
Here are 7 angel investor websites where you can start your search.
AngelList is a website dedicated specifically to help tech startups raise funds, recruit team members, and launch their business with the assistance of angel investors. It's easy for people to find jobs at a startup on this website and invest in companies that they're interested in once they join AngelList, which is why it's very popular among startups that are looking to grow. The blog that's maintained on this website centers around investing and angel investors. Some of the topics that are written about on this blog include how to set up a remote team, how to incorporate diversity into your hiring process, and what the importance of agile methodology is.
Life Science Angels is a top angel investment group that focuses primarily on such industries as biotechnology, pharmaceuticals, medical devices, and diagnostics. Many of the angel investors in this group are senior executives or founders of companies in the healthcare industry. When you visit their website, you can apply for funding and obtain tips on applying, which can be very helpful in reducing the number of mistakes you make on your application.
Tech Coast Angels is a popular angel investment firm with regional networks extending from the Central Coast to San Diego. They have over 400 investors and provide startups with mentoring, knowledge, connections, and assistance with building their businesses. They offer these services to startups in sectors like life sciences, biotech, software, and information technology.
Their website provides information to entrepreneurs in the form of blog articles and other resources. These include tips on what angel investors are looking for, so even if Tech Coast Angels isn’t where you want to apply, their resources may be useful. Their social media presence is centered on Facebook and Twitter, the latter of which provides regular updates that can be helpful when you want to learn more about this investment firm.
Golden Seeds LLC is a unique early-stage investment firm that focuses specifically on providing investments to startups that were founded by or are currently run by women. The main sectors that their angel investors fund include software, technology, consumer products, and life sciences. The blog that they run on their website includes new posts every month that will allow you to learn more about the investors and those they fund. The Golden Seeds application process costs $50 and involves multiple pitch presentations.
With over 275 investors, they are a popular firm and have attracted 2,200 followers on Facebook and the same on Twitter. The regular updates that they post on both of these accounts can help you learn more about the types of companies they invest in.
Hyde Park Angels is a group of investors that focuses on growing early-stage startups that require funding to help them grow. The main industries that they focus on with their investments include industrial technology, information technology, healthcare services, and financial services. They are currently the most active angel investor group in the Midwest with more than 130 angel investors.
When you want to follow this angel investment group, their blog includes around two posts each month that center around fundraising tips and growth guidelines. If you want to follow them on social media, you can do so on Facebook and Twitter.
FundersClub admits about 2% of all the applications it receives. However, they evaluate 100%, so startups that don’t get funded can still learn from the experience. Their application is online, but they prefer companies to network their way in--as in, talking to one of their portfolio companies to get a warm introduction. FundersClub benefits startups not only through investment, but also by providing access to their network, community, and resources.
Angel Investment Network is currently the largest group of angel investors in the world with more than 300,000 members. With such a high number of angel investors to select from, any type of business can seek funding through this investment group. The main sectors that they focus on include technology, software, and property. The blog that they run on their site offers up the latest news about angel investors, startups, and entrepreneurs.
With the number of angel investors, this is among the most popular angel investment groups around. You can interact with them on Facebook and Twitter where they have 20,000 and 23,000 followers respectively.
Not all startups seek angel investment, or investment in general. Whether you do or not depends on your company’s goals and strategy. Many angel investors like to be involved in advising the companies they invest in, so if that is something that appeals to you, you can look for angels who fit that description. If not, there are large venture capital firms that might take a more hands-off approach, and if you’d prefer to eschew investment altogether, grant funding is available through the SBIR program. Whichever route you choose, do your research first and examine helpful websites like those listed above
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