During our last venture, we raised two angel rounds. The first of £140k and the second of £600k. In doing so, we learnt quite a lot and I’d like to share the most practial advice I can give: where you can find angels.

In broad terms, there are  three places to look: networking, angel networks and angel funds. We tried all three and raised money from the first two.

1. Networking

The reality of the situation is that networking will make or break you when you’re looking for angel funding.We raised our first round as we were finishing business school and, after promoting the idea within our class, simply asked if people would like to invest. Several months later we had eight or nine people who wanted to invest lined up and happy with the legals. I’ve heard this working similarly with people who’ve joined private members clubs in London and used them in a similar way. One succesful London-based entrepreneur asked the members of that club if they wanted to invest in business. He asked them each to put in £25k, £50k or £100k and managed to close a round of £600k in a matter of months. (Needless to say, he’s an impressive guy and the business is a strong one.) This is a more unorthodox approach in raising money, but it’s worth trying whatever works.

For our second round we did a lot more of the traditional style networking: going to events and meeting (what seemed like) hundreds of potential angels for coffee. Here we just started in our own network and worked out, finishing every meeting with the question “do you know anyone else who might be interested in this?”. This approach takes time, patience and persistence although is also fun (and the most likely to work!). Former entrepreneurs who are now angels invariably want to help. If you can get an introduction from one angel to another you’re almost 100% guranteed at least a meeting over a coffee and even if you go in cold to an angel with an unsolicited email there’s a good chance you’ll get a meeting with them. The key thing here is to find the people who’ve made lots of money in an area that’s close to your space and then find a way into them. It may not seem obvious at first about how you can get to them, but there’s always a way. Whilst this is the most time intensive of the routes to angel financing, it is also the most likely to come off.

2. Angel Networks

The second area for finding angels is angel networks. And here we should separate offline and online. Offline are the older networks where you go and pitch to a room full of wealthy people. Online is where you put a pitch online and hope angels pick it up. We pitched to a good number of networks over the two rounds that we raised (and a third we tried to raise). They can vary significantly but they are a great potential source of funds.

Unfortunately, to get into the angel networks you nomally have to have networked your way in to one of the angels in advance. Sending hopeful pitch documents (as we did early on) is likely to achieve nothing. Whilst an introduction from an angel from within the network got us a pitch slot every time.

Of the angel networks in the UK, here are some that we came across:

Those we pitched to:

Cambridge Angels - the best angel network we pitched to. Very switched on crowd of 30 or 40 angels attended. Aggressive but good questioning. We raised money from 3 angels out of it. The only issue is that you need to find someone from the group to sponsor you before you can pitch to them.

Enterprise 100 - London Business School Angel Network. 60 or so angels in a room. Very little time for questions and very difficult to tell the calibre of the angels but a good experience. We got follow-ups from about ten potential angels.

Sofia Business Angels. Based in the South of France. An impressive group of anglo/franco/euro/american angels. (Don’t worry pitches can be in English). Good questions and you get to have dinner with the angels afterwards. We raised some money from them. (And the laws have now changed making angel investing incredibly attractive in France so definitely worth a shot.)

CMYPITCH.com. We paid £250 to pitch at their inaugural pitch event and whilst there was a good turnout they didn’t quite manage to reach the quality of company or investor. I imagine they will get better and better though.

Others worth trying:

Pi Capital - An established network with a good reputation.

Envestors - they charge £5,000 + to pitch. Really check they’ve got angels interested in your space.

London Business Angels - An established network although I personally don’t know anyone who has raised money from them.

GEIF -  The Great Eastern Investment Forum (also based out of Cambridge). Tends to write smaller cheques than Cambridge Angels. They also charge to pitch (£750).

OION - The Oxford equivalent to the Cambridge Angels

Online angel networks seem to also be picking up. Bill Morrow (who is a great character) launched AngelsDen recently and it appears to be taking off at great pace. Coming out of it, AngelsDen also run speed pitching events (yes, think speed dating with investors) and other spin offs. Check out some coverage on Channel 4.

The Angel Invetor Network looks like it’s trying to rip off the same idea … but in a far less appealing fashion.

Another online option is CMYPITCH which lets you post a video pitch for angels to review.

3. Angel Funds

The talk of the town at the moment is the fund being launched by Brent Hoberman (of lastminute.com) and Michael Birch (of Bebo) called ProFounders Capital. They’ve got £30M to invest from scratch and are hoping to double it quickly. That means they’re ripe for early stage deals. Obviously they’ve got no track record yet but hopefully they’ll follow the Y Combinator model from Silicon Valley and invest several hundred thousand pounds into lots of different companies.

Initial reports were that Brent and Co were going to call the fund European Founders Capital, but they evidently had to change it, and probably because the name was already taken. European Founders is a fund run by Marc Samwer and his brothers (they were behind the German eBay that eBay bought and then Jamba) and who’ve been at this game for a while. They’re also good friends with Brent.

A less well known fund is Howzat Media, founded by the guys behind Cheapflights.co.uk.

A good one to shoot for is Atomico which is effectively the guys from Skype doing the same thing. They’ve been very active in early stage.

The Accelerator Group have also done a string of early stage investments in some great companies. They have 47 early stage and start up investments all in the tech space. They’re backed by Robin and Saul Klein.

A less pure, but equally valid, source of funding is Seedcamp (partly set up by the TAG group). Great for advice and exposure and a bit of money. It does come with risks though. If you win in seedcamp and then don’t get follow on funding, it’s really difficult to raise money because everyone wonders why the seedcamp VCs aren’t backing you. Still, probably a risk worth taking!

So, I hope that was helpful. The aim of this post was to offer my perspective having spent a couple of years looking at this and to provide a useful list of resources. It is nothing more than my perspective and it is far from comprehensive. I’d love to hear other opinions and other sources you’d recommend. And if you’re out there trying to raise angel funding at the moment. Good luck!

For more general advice, see a great article on hints and tips for raising angel finance on my business partner, John Connolly’s, blog.

Photo couresty of Flickr: aussiegal