3 Important Things Angel Investors Need To Know Before Investing In Startups

As an angel investor, a lot goes into funding a new startup. Not only are you giving them money, but you're also giving them advice, support and other resources at your disposal. 

However, before entering into any relationship with a new company, there are certain things that you must consider – especially when it comes to your public persona. 

As a veteran PR consultant, I've seen a few common issues that typically arise because investors have been caught by surprise when their startup businesses started getting traction and public attention. To that end, below are three essential things to know before giving founders capital.

1. Be Ready To Be In The Public Eye.

As an investor, you're now a key stakeholder. This means your online presence is an important part of the company’s publicity, and good publicity drives the company’s success. Remember that journalists will be asking questions and fact-checking in order to publish stories about the investment; if there is no online information about you, the investment receives less credibility.

We once worked with a fintech startup that had three investors, including one angel investor who absolutely refused to disclose his identity to the public. As a result, the startup couldn’t get coverage in TechCrunch because the journalist wanted to know the names of all investors. Losing out on major media attention like that can seriously hurt a startup’s chances, especially in competitive environments.

At a minimum, you should have a complete, updated LinkedIn profile and a public bio. If you develop and solidify your personal brand with expert op-eds, interviews and comments with respected relevant publications, it will also help further your startup’s PR success.

2. Investments Are Excellent News Hooks, So Prepare To Talk About Yourself.

Startups always want to talk about attracting investments because it's a great way to boost visibility and get positive media attention. It's important to understand that reporters will seek as much information about you as possible, including deal-related details, your background, and what kind of person you are. 

It's best to prepare the information you want to share ahead of time, so you stay in control of what's published. If you don't disclose what the news wants to know, they'll find another source that might be less accurate – and correcting misinformation is much more challenging than just offering your details freely. 

Outlets don't like press releases about rounds that don't include names and figures, so talking about yourself is a must if you want the attention of top outlets. For example, we previously helped a promising agrotech startup with three angel investors. However, two of them did not want to disclose their investments or information because they had corporate jobs and felt it would not be beneficial to reveal their finances. Because of this, the startup was unable to land coverage in big publications.

3. Communications Aren't Your Responsibility.

While it's true that startup founders are looking to angel investors for more than just funding these days, this doesn't mean you need to do everything. 

It is better if investors don't take personal control of a startup's media communications and instead let professionals handle that job. Even investors that have dealt with a few journalists in the past often do not have the nuanced knowledge of a PR consultant, and this can result in unintentionally harming the startup’s communication strategy or reputation in the news.

Additionally, an outside professional is able to be more pragmatic, so it's beneficial for investors to let a PR person be in charge of handling media relationships because they have deep expertise, a helicopter view and the startup’s best interests in mind. This doesn’t mean handing over their own duties to participate in PR, though. It’s still important for investors to have visible media participation. 

There are many other things startups need from angels, so try to minimize your desire to direct press relations, too.

Being An Investor Is More Than Just Handing Over Capital Now

As soon as you become involved with a startup, you are part of its public persona and its story. Before making any investment decisions, it is important to seek the help of a PR professional to help you shore up your online presence, understand what a startup needs from you, and learn the best ways to communicate with the media to position yourself and the company in a positive light.