How to activate new angels in 7 steps

Published on 31/01/2019
Belgium

Recruiting and activating new angels is not an easy task. Claire Munck, CEO and Managing Director of the Be Angels network, explains how to achieve it in just seven steps. “You have to be careful when recruiting your first angels, because they will give your network its image. It’s essential to ensure that angels are of high quality: they should be able to invest and be willing to help the entrepreneurs,” says the #ESILangel for Belgium.

1- Good deal flow: Both quantity and quality should be considered at this point. “Of course, quality comes first, but deal flow has to be frequent because you should be able to choose between a sufficient number of quality deals,” advises Claire. She has no doubt: “In order to activate your angels and convince them to join a group, the first thing you have to do is make sure that you have relevant projects from different sectors and that there are enough of them, so they can choose.”

2- Role models and communication: “It is easier to convince angels to join the group when there is someone accessible to them who can explain why he/she became an angel,” says Claire”. “It should be someone that can convince anybody to be an angel, someone they can relate to,” she says. At the same time, it is fundamental to “give visibility to all the activities of the network.” That means organising events, posting testimonies on the website and also appearing in the press. These marketing efforts are vital to activate new angels, according to Claire.

3 - Recruiting by co-optation is best: Marketing efforts are very helpful, but in the end recruiting by co-optation is the most common method of attracting new angels. “This means that you have to have some members that are convinced that you are doing a good job; [you achieve this] first by finding good deals for them but also by providing other services. If they are happy, they will invite some of their friends who are also interested in investing in start-ups to join the network.”

4 - Provide services such as co-financing: “This is more about syndication. Enable syndication opportunities, so that the angels can diversify their investments and start investing smaller amounts, but together [as a group]. You can set up different co-financing instruments to leverage your active angels,” asserts the CEO of Be Angels. Building a portfolio is important to building an investment strategy as an angel, to diversify your risk and increase the potential chances of return on investment.

5 - Training opportunities: Better known as “capacity building”. “This is about learning, not through theory but more through practice: sharing investment practices among the angels. This is such a specific activity and whatever they’ve done before, new angels have to become familiar with investment principles of start-up investing.”

6 - Raise a co-investment fund: Co-investment allows you to make larger investments without dedicating too much of your own capital to a single transaction. “This is especially useful in public-private partnerships. [This is about] using the investors’ private money and leverage it with co-investors to make sure that the companies receive sufficient financing.”

7 - Help them to prepare for the exits: “This goes back to visibility: making sure that the quality of your angels is well-known, making sure that the quality of your portfolio is well-known. This can lead to identifying potential co-investors or buyers in your country but also in another countries. You should make sure that your invested companies are featured in different conferences and in the right (international) press. As I said it goes back to marketing, making sure that the potential buyers or investors know about the quality of what you are doing.”