Angel Investing Made Easy: Your 6-Step Guide to Spreading Your Wings

In the past, we have shared a number of technical blogs to equip our community members with the right skills when they become angel investors. Despite all the content we have produced we also like to bring it back to the basics so that we don’t miss anything important for our members. So in this blog post, we decided to bring it all the way back:

How do you actually get started as an angel investor?

It might seem overwhelming to get started as a new angel investor but in this article, we will break down how to do your first angel investment in the UK in 6 easy steps. 

Step 1: The Basics of Being an Angel Investor

The first thing you need to do is familiarise yourself with the ABCs of angel investing. We have written some articles in the past, which will help you to develop not just your skillset as an angel investor but also your mindset. For instance, check out these articles The 3 biggest mistakes angel investors make when investing in startupsor “Market Size in Angel Investing: What is it, Why it matters and How to calculate it?”. Putting the work in ahead of time and by familiarising yourself with some key concepts and terms will help increase your chance of becoming a successful angel investor. 

Step 2: Get Certified

Think of this as your angel investor badge. In the UK, you’ll want to get certified as either a High Net Worth Individual (HNWI) or a Sophisticated Investor. This is a straightforward process that helps ensure you have the knowledge and financial capacity to take on this role. When you take the cohort-based Angel Investing School program you will automatically be certified as an angel investor and be equipped with all the right skills to make good decisions during the investment process. 

Step 3: Source your first deal

You have done all the prework and got yourself certified and now it’s time to look for your first deal! There are a number of ways for you to find your first deal. Join reputable angel networks like Angel Investment Network, Seedrs, or Crowdcube. Attend local startup events, pitch competitions, and networking sessions. Events like “Pitch at Palace” or industry-specific gatherings provide opportunities to meet passionate founders and discover innovative ventures. When you join AIS you will immediately get access to high-quality dealflow on Slack. Don’t get frustrated when taking this step, some angel investors take years to develop their deal flow!

Step 4: Embrace the Lingo

Now you have found a pitch deck and founder that you like. Getting familiar with a few technical terms will help you understand the ask of the founder much better. Phrases like “Advanced Subscription Agreement” (ASA), “EIS/SEIS” (tax incentives that make your investments even sweeter), and “Term Sheets” (like a roadmap for your investment) will become part of your investing vocabulary in no time. Make sure you are very clear on these terms before you decide to go any further with a deal as you should never invest your money in something you don’t understand. Check out our AIS Dictionary to learn about the different terms you may come across during your journey 

Step 5: Research, Research, Research

Once you have reviewed the pitch deck and familiarised yourself with some key terms in the pitch deck it’s time for you to conduct your due diligence. Due diligence (DD) processes come in many shapes and forms and can last from days to weeks. Types of due diligence processes you can conduct are interviews, research, reference checks etc. It is important to remember that you don’t need to have all the answers during this process but what’s more important is to ask the right questions to reveal the value/risk proposition of an investment. Make sure you dive deep into the startup’s business plans, leadership team, and market potential. 


Step 6: Choose Your Investment Vehicle and Invest!

So you have done all the steps above and are ready to invest after a long and thorough DD process. It is now time to choose your investment vehicle. There are many different ways for you to invest as an angel investor. One popular option is an “equity investment,” where angels buy a percentage of the company’s ownership. Alternatively, they can opt for a “convertible note,” which starts as a loan but can convert into equity at a later funding round. Another approach is an “advanced subscription agreement,” a newer model similar to a convertible note, offering flexibility and simplicity in investment terms. As mentioned above make sure you familiarise yourself with each term before deciding. Once you have, make a decision and congratulations you have made your first investment!


And there you have it, you are officially an angel investor after following these steps and making your first angel investment! Remember, like anything new, it will take time to get a hang of it and this is why communities like the AIS are here to help you and support you on this journey. So, go ahead and take that leap – you’re now armed with the knowledge and steps to make your mark in the UK’s vibrant startup ecosystem as an angel investor. 

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