Online angel investing doesn’t work.
High net worths don’t do things online.
We’ve all heard these age-old adages, but, upon closer inspection, do they hold up?
A study by PWC showed that 98% of HNWIs use the internet daily. They don’t just use the internet, they spend 3 hours a day on it.
With multiple social networks to grab their attention and lockdown to keep them away from offline events, HNWIs are using the internet more and more.
41% consider themselves to be early adopters of technology, and they’re using that savviness to invest online at a much larger rate than, say, 10 years ago.
In fact, one survey from Accenture Consulting found that 83% are already using digital for financial services.
As HNWIs are evolving their investment strategies, so should angel networks. It may even be the best time to get at the forefront of digital innovation and start using online platforms to facilitate investment.
Getting started is the hard part. However, since online dating apps have been around for a while, angel networks can learn a lot from them.
Online investment platforms perform a function similar to that of dating apps – they make it easier to find that someone (or in this case, thing) special
1. It all starts with your profile
A broad portfolio is a must for investors. They’ll want to hone in on certain sectors, but also have enough deals to look over to allow them to build a portfolio and minimize risk.
Where offline events would put your investor network in front of a select number of deals, an online approach opens the door to an entire ‘dating pool.’
With access to an entire pool of opportunities, how do you grab their attention?
Find a platform that allows you to add all the information investors would need to a deal profile – traction, team, supporting financials, valuations.
Make sure it’s all there before presenting deals to investors and update that information regularly.
2. Ask questions
A second issue for investors in the traditional model is ready access to information on deals. After taking part in offline pitch events, investors are only left with a brochure and a short pitch to go by.
It’s hard to make a decision on a company on the spot, so investment relations managers need to be proactive in asking investors what caught their eye.
Choose a digital platform that provides advanced filtering options as well as smart matching to allow investors to easily zero in on those opportunities which are most suited to their preferences.
Like a dating app, an online investment platform allows for smoother communication and the ability to ask and answer questions and quickly update information in real time.
3. Pay attention to signals
Previously reliant on pitching events that feature only a handful of companies, investors know that showing interest in a deal will result in a lot of conversations they may not be prepared to have.
If they want more information on a deal, they have to contact the network or company directly and be bombarded with follow up calls.
As a result, many will walk away unless they’re 100% sure they want to invest the time and effort in a company.
With a digital platform, they can start looking into a deal without having to proclaim their interest. They can go online at their leisure, read about the opportunity and interrogate the companies’ business plans. They can then go on to ‘follow’ deals as companies post updates.
Online platforms will allow you to see which deals they’ve visited and which they’re following, and want more information on.
We built our network platform, Envestry, with these features in mind. We know that peeking investors’ interest in your companies is a difficult job, so we’ve built a tool that does the job for you.
Envestry is a friendly, easy-to-use branded marketplace that allows you to post deals and share them with investors. They will be able to ‘follow’ companies or pledge investment and will be alerted when there are:
- New developments in the team
- New investor pledges
- Updates on partnerships and customers
- Q&A – Investors may ask companies questions and receive responses on the platform
We’ve also built a syndication feature that allows networks to share their deals with other network partners, if struggling to fundraise for their companies.