Raising capital from angel investors is a crucial step for early-stage startups looking to develop their products, build a strong team, and expand their market. However, according to Alicia Syrett, an experienced angel investor and TEDxFultonStreet speaker, investors reject 98-99% of startup pitches. This means only a small percentage of startups successfully secure funding, while the vast majority get turned down for various reasons.
The problem doesn’t always lie in the business model or market potential. In many cases, startups fail to impress investors because of avoidable mistakes that damage their credibility. Understanding these mistakes and steering clear of them can significantly improve a startup’s chances of securing investment.
One of the most common mistakes is not researching the investor before pitching. Every angel investor has specific investment preferences, focusing on particular industries, growth stages, and business models. Some prefer tech startups, while others prioritize social impact businesses. Sending a pitch to an investor who isn’t interested in your sector is a surefire way to get rejected. Alicia Syrett highlights that many founders blast their pitch decks to hundreds of investors without personalizing their approach, which often leads to instant rejections. Investors can easily tell when an email is generic, and receiving an irrelevant pitch not only wastes their time but can also hurt a startup’s reputation in the investment community.
Another major reason investors walk away is founders with poor character or unprofessional behavior. Angel investors don’t just invest in ideas—they invest in people. A startup with a strong, ethical, and adaptable founding team will always be more attractive than one with a weak leadership structure. Behaviors like dishonesty, exaggerated claims, or an unwillingness to share transparent information quickly turn investors off. Syrett shared an example of a founder who displayed a lack of professionalism during a pitch meeting, and unsurprisingly, he failed to secure any investment. Investors want to work with founders who are open, accountable, and easy to collaborate with.
Many startups also make the mistake of focusing too much on money while failing to highlight the value they bring. Angel investors do more than just write checks—they provide industry knowledge, business connections, and strategic guidance. If a startup is only interested in the money and fails to articulate how an investor’s experience and network could contribute to its growth, it becomes much less appealing. This is particularly important because investor-founder relationships can last for a decade or more. If there’s no strategic fit beyond financial backing, investors are less likely to commit.
Another common reason for rejection is failing to demonstrate strong growth potential. Investors need to see that a startup has the potential to scale and generate significant returns. If a founder only presents an idea without supporting data—such as user growth, revenue traction, or market expansion strategies—they’re unlikely to win over investors. As Syrett puts it, “Ideas are just the starting point, but execution is what really matters”. Investors want evidence that a startup can turn its vision into reality, and without concrete proof of traction, most pitches fall flat.
Finally, not having a clear financial plan and a well-defined use of funds can quickly kill an investment deal. Angel investors want to know exactly how their money will be used and how it will create value. If a startup cannot provide clear answers on its financials, including cash flow, profit margins, and projected returns, investors will lose confidence. A well-prepared founder should be able to explain how much funding is needed, how it will be allocated, and what key milestones will be achieved with the investment. Poor financial planning signals a lack of business acumen, making investors hesitant to take the risk.
At the end of the day, securing investment from angel investors is not just about raising money—it’s about building strategic partnerships. Avoiding these common mistakes—failing to research investors, lacking transparency, failing to demonstrate value, or not having a solid financial plan—can significantly increase a startup’s chances of getting funded. More importantly, founders need to prove that they’re not just pitching an interesting idea, but that they have the skills, vision, and execution capabilities to turn that idea into a successful business.
