Guest Spotlight: Kala Marathi – How to “Find” an Angel Investor

From time to time, I will feature a Guest Spotlight – friends and associates who I believe are making a great impact on many of the topics I discuss in the blog.
Our first Guest Spotlight is from Kala Marathi, managing director of the Houston Angel Network. She has more than 10 years of operating and financial experience, and was formerly with Reliant Energy where she was a founding member of the corporate venture group, Reliant Energy Net Ventures, and led investments in home automation technologies. She has also worked with Continental Airlines and Chase Manhattan Bank.
It should come as no surprise that I’m going to talk about my favorite topic: angel investing. In specific, I’d like to talk about “How to find an angel investor.”
I ran across an article in Business 2.0 that talked at great length about ths topic. However, the article (and most articles on similar topics) talk about how to work with angel investors and not how to find them.
There are four ways to find an angel investor:
1. Network at organizations that tend to attract angel investors: Angel investors tend to work with several entrepreneurship-focused organizations in town. These organizations include, but are not limited to, BioHouston, HTC, MIT Enterprise Forum, Rice Alliance and Texas Entrepreneurs’ eXchange (Texchange).
2. Get a professional reference: Your lawyer, accountant, banker and other service providers are a great source of referrals to angel investors. Most firms that I know of (such as PKF Texas) have thick rolodexes that they might be willing to leverage on your firm’s behalf.
3. Get a reference from your current investors: Ask your current investors to refer you to their friends and business colleagues who might be interested in investing in your company. Angel investors tend to have friends who are interested in the same sectors/topics, so one life science investor can lead you to more potential life science investors. These are (in my opinion) the best kinds of referrals you can get, because the referral comes from someone who has “skin in the game.”
4. Search the Web: There are several angel investment organizations across Texas, and almost every major city in the state either has one or is planning to create one. The benefit of these types of organizations is that you can get exposure to many angels at one time, and get coaching on how to work with angel investors. Contact your local angel investment organization and start a conversation. Two organizations to start with include the Houston Angel Network and the Angel Capital Association.