Why You’re Not Hearing Back From Investors
Every year AngelCentral receives over 1000 funding applications.
Here’s what happens next:
- 200-300 applications would pass the initial Partner screening to reach the AngelCentral Review Committee (ARC)
- ARC interviews / further reviews and eventually votes for 40-50 companies to pitch at the AngelCentral pitch days (If we speak in monthly terms, 4-5 companies pitch every month)
- Based on members’ past few years of investment data, around 25–30 companies per year receive direct and/or syndicated investments
The Maths Behind 1000+ applications to 200-300 passing cases
If you have submitted an application to us and received a rejection email, this article explains why – from the investors’ perspective.
All founders – whether they reached out via email, linkedin, or warm introductions – are ultimately asked to complete AngelCentral’s online application form if they wish to pitch or reach out to our members.
The form consists of 30-40 structured questions, covering:
- Founder background
- Business model and intentions
- Growth and execution progress
- Funding requirements and terms
Apart from the business summary, most questions are drop-downs or checkboxes. In other words, if you have seriously thought through your business, none of these questions should be difficult to answer.
Yet, nearly 40% of the founders fail to answer some of these key questions about their own businesses.
These applications are filtered out, and never reach the Partners for round-1 screening.
Yes – this form is intentionally designed as an early filter. It helps us assess how thorough, prepared and considered founders are at this stage of their journey.
What We Ask — and Why We Ask It
I) Founder Profiles
It may sound cliche, but it remains true: early stage investing is fundamentally about people.
As an investor, my first check is always on the founders.
At this stage, we are still doing paper-based investigations (not making reference calls etc) based on information shared by the founders. So, at minimum, I would expect
- A credible and reasonably detailed Linkedin profile
- Clear indication that the founder is actively working on this venture.
- The person’s past work experiences are also relevant info – does he/she have relevant past history for this new business.
This is not about perfection. It’s about the basic signal and seriousness into this new business you are trying to fund raise for.
Common “features” of applications that fail (not necessarily all present at once):
- The new venture is not listed on Linkedin
- The Linkedin profile is brand new, with no prior work experiences or education
-
The listed CTO is simultaneously CTO of several other businesses
(Understand why this happens — but please see it from an investor’s point of view.)
II) Investment Deck and Financial Projections
Investment deck and financial projections are standard documents in any fundraising process.
Most applicants have no issue providing them. However, some submit instead:
[AC read: What should be in an investment deck? ]
- business proposals
- site mock ups
- research papers that the business tech is based on
- long personal essays on why the founder wants to build this business.
While such expressions of personal ambitions may be interesting, they do not replace an investment deck or financial projections.
The inability to provide these documents signal that the founder has not yet learned the basic investment norms.
These norms are not hidden knowledge or “Kung Fu secret scrolls” — they are widely available, and tools like ChatGPT can easily help founders structure a proper deck.
When we screen applications, we are NOT looking for gems (yet); Applications that cannot meet minimum bars already say a lot about readiness for the funding journey. Not having these basics in place is detrimental, regardless of how promising the idea might be.
III) Funding Terms
When I go to a supermarket, I rarely pick up an item without a price tag. I need to know how much it costs before I decide if I want to buy it, and of course it’s always troublesome to check out with no tag.
An investment application with no funding terms is like an item with no price tag in the store.
Founders may say
1) I don’t know the right valuations to ask;
2) I am happy to negotiate.
For the former, just remember that a good founder is someone who has answers and not one to say “I don’t know”; for the latter, well, you got to give a starting point.
Ultimately at this juncture, we just want to know you know the norms and you know how this process works.
That said, we also move on quickly from unrealistic funding terms. Some examples that I came across before: a pre-rev startup asking for USD 500M valuations; or asking to raise a 4.5M round at 2.5M valuation (real case, I emailed the applicant to see if there’s a typo but he replied the info submitted is correct)
While the AngelCentral Review Committee does not screen out “expensive” deals by default (we recognise that investors have different yardsticks), unrealistic terms signal poor judgements and are typically ignored.
Execution and Traction Matter (A LOT!)
As a rule of thumb, investors look for executions and tractions.
Unless the founder has prior successful exits, it is highly unlikely for angels to invest based on business proposals, a.k.a. plans on paper, talking about how they intend to execute but totally no executions yet.
In the current investment climate – where interest rates are high (vs. previous decade) and other asset classes offer faster returns – Southeast Asian investors are far more selective.
Rather than chasing “potential unicorns”, many angels now pool resources to support companies that demonstrate good revenue patterns, healthy growth patterns, and clear paths to profitability.
Founder Commitment is Non-Negotiable
It is human nature that we want to retain financial stability. So it’s understandable when founders want to “retain” their full time employment, just in case the startup experiment does not work out.
However, it becomes problematic when founders attempt to raise external capital to fund an experiment they themselves are not fully committed to.
Working after office hours on your pet project or on weekends is effort, not risk.
Investors expect founders to take meaningful personal risk. Lack of commitment is a definite deal breaker for any investor.
Final Thoughts
Investors do not reject founders because we are bad people or because we don’t like you. It’s never personal. We move on because there are always more opportunities that meet our criteria.
If you are fund-raising and are not hearing back, it may be good to ask if you have sent the correct signals to the investors: that you are serious about this venture and that you have done all that you can to grow it to as much as you could now without external help.
Want to better understand how investors evaluate applications, deals and funding terms? Join us at our AngelCentral Startup Series: Fundraising Your First Million workshop.
