How to Raise Your First Round From Angels

Step-by-step guide to raising angel funding: valuation, pitch deck, terms, and closing your first investment round.

1. Set your target and valuation range. Target $250K-$500K for a meaningful first round that gets 12-18 months runway. Price convertible notes at 15-25% discount with $3M-$8M valuation cap, or equity rounds at $1M-$5M pre-money for sub-$1M revenue businesses. Angels expect 20-30% dilution maximum per round.
2. Build proof of sustainable unit economics. Document monthly recurring revenue growth, customer acquisition cost under 3x lifetime value, and gross margins above 70% for software or 40% for physical products. Angels invest in businesses showing $10K+ monthly revenue or clear path to $100K ARR within 12 months.
3. Create a 10-slide pitch deck. Include problem, solution, market size, business model, traction metrics, financial projections, funding use, and team backgrounds. Lead with your strongest metric—revenue growth, customer count, or gross margin improvement. Keep projections to 3 years maximum.
4. Source 50-100 angel prospects systematically. Target angels who invested in your industry, stage, and geography through AngelList, Crunchbase, or local angel groups. Prioritize warm introductions from customers, advisors, or other founders. Expect 2-5% conversion from initial contact to investment.
5. Run a structured 90-day process. Send pitch decks in batches of 10-15 weekly. Schedule 30-minute initial calls, then send data room access to interested investors. Set a target close date and communicate momentum. Expect 60-90 days from first meeting to signed term sheet.
6. Negotiate terms and close efficiently. Use standard SAFE or convertible note templates to minimize legal costs under $5K. Accept market-rate discounts and caps rather than optimizing every term. Require minimum $10K-$25K individual investments to keep your cap table manageable under 20 investors.