Want Angel Funding? Here's How

It’s one of the most pressing questions for startup entrepreneurs: how can I win funding from angel investors? David Rose, author of Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups, estimates that “angels invest in maybe one out of 40 deals they see,” for a hit rate of 2? – 3%. How can you make sure your company joins those ranks? Here are four tips Rose shared in a recent interview.

Network the right way. “A lot has been written about the ‘old-boys network’ and ‘who you know,’ and that’s actually bullsh*t,” says Rose. Most angels aren’t flipping through the alumni roster to find deals. Instead, they’re going to events where any aspiring entrepreneur can meet them. “You’re much more likely to find angel investors through going to tech meetups and other kinds of conferences,  and getting involved with people in this space. One of the great sources for deal-flow for angels is CEOs of their existing portfolio companies. If you invest in somebody, you trust their judgment, and if they say ‘this is a company you’ve got to see,’ then you talk to them. So go out and engage in the community.” Rose won’t rule out investing in people who cold call him, but for him – and most other angels – it’s not the preferred route. “The trick in many cases is to get to somebody who can introduce you to an angel. It’s not that it’s ‘who you know.’ It’s that having somebody reach out to you through some intermediary helps to provide the signaling [that you’re credible].”

Give back. “Everybody has something to give back,” says Rose. Whether through teaching or mentoring other entrepreneurs, or providing help or connections, you can make a difference to others and that goodwill will come back to you. He cites the experience of a woman named Tara Hunt who gave a well-regarded TEDx talk about her life as an entrepreneur. “It’s about the really tough, challenging life she experienced in a start-up,” says Rose. “It was really interesting and it’s now become a classic that I use in some of my lectures, and she’s made a real name for herself with that one talk. People now know who she is…It’s a very interconnected world where the more people you’re connected to, the better off you’re going to be.”

Accept standard deal terms. No matter how great your company is, you can kill angels’ interest in a deal by insisting on non-standard deal terms.  Recalling one prospective deal a few years ago, Rose recalls, “I was ready to do it. I was ready to say, ‘That’s really cool, I’ll take a big bite’, then they said, ‘Okay, here’s our deal structure.’ They literally covered this very conference table with a print-out the size of the table, going ‘This company owns the IP, and this is licensed here, there was a company that owns that’…I’m looking at it saying, ‘Hello, what? No.’ So even though…people were willing to bet on this advanced futuristic technology, nobody was willing to clean up the crap they had done for their deal structure. It just didn’t make any sense.” Advises Rose, “The best thing you can do is to be standard. People have been doing this for decades; they know how to do it, we know how to do it, it’s how the game is played. Be standard.”

Assemble the right team. Of course angels love a brilliant founder or co-founders. But that doesn’t get very far if you haven’t built up the right team around you. “What I’ve come to realize after all these years is that it’s a question of team chemistry,” says Rose. “Hire slow and fire fast, which is generally very difficult because both sides are counterintuitive.”  But with the right players onboard, your startup will be far stronger, more nimble, and more attractive to angel investors.

Winning funding from angel investors isn’t easy. But if you get involved in the startup community, give back, build the right team, and don’t try to reinvent the wheel on deal terms, you’re well on your way to beating out the other 97% of aspirants.

This post originally appeared on Forbes.com.

Dorie Clark is a marketing strategist who teaches at Duke University’s Fuqua School of Business. She is the author of Reinventing You and Stand Out, and you can receive her free Stand Out Self-Assessment Workbook.