Investors Don’t Experience FOMO
Dealflow Is Never the Issue for Angels Who Engage
For anyone venturing into the world of angel investing, one universal truth emerges quickly: dealflow is not the bottleneck. Hang out a shingle, announce to the world that you're ready to fund entrepreneurs, and the wave of opportunities will come crashing in. The challenge lies not in finding deals but in sifting through them for the gems that align with your goals and risk tolerance.
Many angels struggle with this reality. The volume of pitches and the inherent risks in early-stage investing drive most to aggregate into angel groups or funds. This model offers safety in numbers, social interaction, and, crucially, a gatekeeper—a buffer against the overwhelming deluge of pitches. But for those who boldly declare their willingness to engage directly with entrepreneurs, dealflow becomes an abundant resource.
At our group, we proudly tell the world we’re angels seeking exceptional deals. This transparency and openness result in us reviewing anywhere from 250 to 1,200 pitches annually. And while the volume can be daunting, it also underscores an essential truth: it’s not hard to get entrepreneurs to swim to your shore if you offer free money.
The Harsh Realities of Startup Investing
Experienced investors know that startup investing isn’t the glamorous lottery ticket many imagine. Instead, it’s more like adopting a puppy—a long-term commitment with no guarantees of success. It’s a relationship requiring care, attention, and a willingness to endure sleepless nights.
Here are some sobering statistics to keep in mind:
80% of entrepreneurs aren’t ready for funding. They lack the traction, strategy, or clarity needed to make their case.
90–95% of startups fail. Even with a solid pitch, the odds are stacked against success.
The goal is to find the top 5% to pitch and the top 1% to invest. For investors operating under a traditional VC model, this means filtering rigorously and investing sparingly.
These realities place the burden squarely on entrepreneurs to prove they belong in the top tier. The message is clear: if you want to stand out in a crowded field, you need to demonstrate that you’re ready, worthy, and exceptional.
What Smart Investors Expect from Entrepreneurs
Savvy investors aren’t driven by fear of missing out (FOMO). They don’t cave to pressure sales tactics or flashy pitches. Instead, they focus on a rigorous evaluation process that prioritizes clarity, realism, and mutual respect. Entrepreneurs who recognize this and adapt their approach are far more likely to succeed.
Here’s what smart investors look for:
A Realistic Understanding of Risk
Investors know that every startup carries risks—some known, some unknowable. Entrepreneurs who acknowledge these risks and proactively address them earn respect. Come to the table with a clear list of why an investor shouldn’t back your company. This may sound counterintuitive, but it demonstrates self-awareness and a commitment to navigating challenges head-on.
Respect for the Investment Process
Startup funding isn’t a handout—it’s a calculated financial and social risk. Investors are entrusting not just their money but also their reputations to you and your venture. Show them you understand the gravity of this decision. Acknowledge their position, engage thoughtfully, and respect their time and expertise.
A Compelling Case for Success
Standing out in the top 1% of all deals requires a combination of vision, execution, and preparation. Your pitch should showcase:
A deep understanding of your market and competitors
Clear evidence of traction or progress
A realistic plan for growth and profitability
A leadership team capable of executing the vision
A plan to exit and return capital to your investors
Ultimately, investors are betting on you as much as on your idea. Demonstrate that you’re prepared to lead through challenges and adapt to changing circumstances.
Building Better Relationships with Investors
For entrepreneurs, the path to funding isn’t about dazzling investors with polished pitches or glossy decks. It’s about building a relationship rooted in mutual trust, respect, and understanding. Smart investors want to see that you respect their process and value their partnership.
Here’s how to forge that connection:
Be transparent. Don’t hide your weaknesses; address them. Show that you’re tackling potential pitfalls proactively.
Focus on mutual alignment. Investors are looking for a win-win relationship. Highlight how their expertise, network, or resources align with your goals.
Respect their time. Come prepared, communicate clearly, and be concise.
Listen and adapt. Feedback from investors is invaluable. Be open to constructive criticism and show a willingness to evolve.
The Investor’s Perspective
As investors, we face our own risks and challenges. Every deal carries the potential for financial loss and reputational harm. By investing in a startup, we’re not just committing capital—we’re committing to a partnership that could last years.
This is why we take our time to evaluate opportunities, why we’re selective, and why we expect entrepreneurs to rise to the occasion. A successful pitch isn’t just about securing funding; it’s about demonstrating that you’re prepared to navigate the highs and lows of startup life with resilience and integrity.
Conclusion
Dealflow is never the issue for angels who engage openly with entrepreneurs. The real challenge lies in navigating the sea of pitches to find the few that are ready to make a meaningful impact. For entrepreneurs, the key to standing out isn’t about pressure tactics or flashy presentations—it’s about proving that you’re prepared, capable, and respectful of the investment process. If you are not selected for funding, it does not mean you don’t have a good business. It just means that you don’t have an investable business. Take the feedback you receive and put your energy into evolving your business to become investable, or, better yet, not need it.