How to Get Deal Flow as an Angel Investor

Angel investors look out for deals, deals and more deals. It’s not rocket science — more investment opportunities translate to better chances of finding those home-run portfolio companies. Still, rejections are prevalent. The Center for Venture Research at the University of New Hampshire found that angels reject seven out of ten deals. Why? Angels are notoriously hard to impress. They're ultra-selective because of the risky terrain they venture into.

So it sounds straightforward, right? Just go out and find those companies with potential. Well, not exactly. Accessing deal flow at the early- and growth stage is anything but a piece of cake. Not everyone has the network, know-how, or structural process to find killer deals. Before we dive into the problems that arise when looking for opportunities, let us look at the term deal flow and what it means for angel investments.


What is Deal Flow for Angel Investors?

Deal flow refers to the rate, volume and quality of investment opportunities available to angel investors. It is the lifeblood of early investing. Without deals to evaluate and fund, the investment process grinds to a halt. Deal flow is a crucial benchmark that helps you get your hands dirty as an angel investor. Both angels and VCs rely on deal flow, but how that deal flow gets generated can differ substantially between the two groups.

A steady deal flow provides angels with potential deals to evaluate and consider investing in. However, not all incoming deals will align with an investor's criteria or get pursued further. The key is to focus on the quality of deal flow and whether it aligns with your goals/philosophy.

While external factors like market conditions and economic cycles impact deal flow, angel investors may remain insulated and take proactive measures to enhance it.

For those dipping their toes into angel investing and the veterans of the game, deal flow is critical. It allows angels to:

• Gain deal access and review options

• Build conviction around best bets to fund

• Develop investing experience and pattern recognition 

We understand that deal flow matters. So, what's the catch? In a nutshell, finding those quality young businesses and teams with potential is challenging. Moreover, what do you do once you source a deal? Do you have the leverage to negotiate a fair share for your funding? Let's dig deeper into the issues that may arise.


Is Deal Sourcing Hard? Challenges Faced by Angels

Many first-time angels struggle with the sheer breadth of possible deals and the absence of structure and consistency around sourcing. It's easy to become overwhelmed! Individual angels have to pound the pavement and leverage their personal circle to find deals, as they lack the reach of large VCs.

Continuously confronting new (and not-so-new) angel investors are the following hurdles:


Unpredictability: There is often unpredictability around the volume of inbound deals an investor receives. This makes it difficult to rely solely on what comes in the door.

Unorganized process: Lack of a standardized deal flow process makes it harder to evaluate opportunities consistently, especially when just starting.

Time-consuming: Researching and identifying promising startups still under the radar requires significant time and effort. It is neither quick nor easy.

Limited leverage: Unlike angel groups or VCs, brand recognition and credentials as an individual angel may still be building. This provides less leverage to access top-tier deals.

Information gaps: There may be limited transparency and insights available around earlier-stage ventures. The limitations around due diligence can really hurt individual angels.

Fewer touchpoints: With only a few hours weekly to devote to angel investing, the deal flow bandwidth and volume get constrained.

Bias trickle down: Referral networks and patterns amongst more prominent angels tend to funnel deals towards similar founders and ventures.

No scalable process: It is difficult for rookie angels to establish a standardized system for deal flow. The approaches are more ad hoc and based on personal outreach and networks.

Difficulty saying no: Angels may struggle to say no to deals out of obligation or to avoid missing out, leading to decision paralysis and distraction.


With fewer resources and no structured deal team, the deal sourcing burden on angels is immense. But there are solutions.... like leveraging angel investor groups.

Keiretsu Forum has a robust deal flow pipeline and presents the most promising ventures to members. The #1 US angel network for 3 years in a row (as per ARI's HALO Report) hosts cutting-edge deal flow events to facilitate consistent access to innovation. When members co-invest in deals, they can leverage their collective power even though individual checks may be small. Our due diligence team uncovers the finer details and helps members save valuable time. 

At Keiretsu Forum, quality deal flow keeps on coming throughout the year. The value-add that comes from observing experienced angels source deals, evaluate ventures, and negotiate favorable terms cannot be overstated. When you're onboard an angel group, try and pay attention to how investors structure decisions and ask questions. It's fascinating to see the logical maneuvers and perspectives they employ. Roll up your sleeves and get involved well before you start deploying capital! Learn all about membership here.

Moving on, did you know deal flow events need not be in-person all the time... 


How to Find Deal Flow Events Online

Even though many angels choose to invest in companies within their vicinity, the situation is changing. Covid introduced many norms. One of these was the rise in digital deal flow. Online-only or hybrid deal flow events allow investors to check in on fascinating companies from the comfort of their homes.

Some ways to locate relevant deal flow events online include:


Join Keiretsu Forum: Membership allows access to 60+ annual online deal flow events with hundreds of deals and thousands of investors in attendance at our Roadshows, Summits and Expos.

Attend VC/Angel Group Events: Investor associations and angel groups like Keiretsu Forum frequently organize meetings and programs with presentations by up-and-coming companies.

Search Online Directories: Sites host various startup funding events like demo days, pitch contests, investor meetups, etc.

Check Event Calendars: Accelerators and incubators in your region likely promote upcoming sessions and demo days showcasing new companies.

Follow Local Organizations: Your city or state's entrepreneurship associations, startup councils, small business groups, etc. often host events.

Leverage Contacts: Ask mentors, lawyers, and founders in your network about upcoming events where you can connect with entrepreneurs and investors.

Search by Location: Look for startup or tech events happening in your city over the next few months. Curious about our events? Check out Keiretsu Forum's event calendar.

Set Up Alerts: Sign up for newsletters from startup publications, tech blogs, and accelerators to get alerts on the latest demo days, funding events, etc.


Checking online event directories, following key players in your local ecosystem, and tapping into your networks are great starting points for finding promising deal flow events taking place in your region.

Consistently attending these will expand your visibility among founders and the deal pipeline.

So now that you know how you get better at deal flow and find deal flow events online. Let's round off the blog with some supporting advice. Here they are in no particular order:

· Actively participate in the angel community to build your network and learn best practices.

· Attend industry events, take advisory roles in businesses.

· Tap into networks and get recommendations from trusted contacts like lawyers, investors, and portfolio companies. These often provide instant access to more opportunities.

This blog is part two of our series on How to Become an Angel Investor. Click here to read part one.




 February 20, 2024