Landing an angel investor is not always an easy task, especially if you don't have experience raising funds.
8 Jun, 2017FORBES.COM
One of the common challenges that most, if not all, businesses face is finding the initial investment needed to get off the ground. Angel investors can be the perfect solution to get your startup or small business up and running.
Landing an angel investor is not always an easy task, especially if you don't have experience raising funds. So, why should you spend a ton of time and effort to find angel investors when there are other ways to find investment money?
Angel investors can help jump-start small businesses that have a great product and superb organization, but lack financial flexibility. These investors tend to inject a hefty amount of money, which often results in almost immediate growth and development.
Another great advantage of angel investors is that they usually have experience in the industry in which they choose to invest, and they like to get involved. Having an experienced entrepreneur to mentor you and help you make difficult decisions can be even more valuable than the financial investment itself.
If you are familiar with online marketing, you may have heard the term buyer persona. Buyer personas are fictitious depictions of a company's perfect customer. You can apply the same concept to angel investors in order to narrow down your options and increase your chances of landing a significant investment.
Depending on your industry, create a profile of the perfect investor for your company, or "investor persona", if you will. When searching for angel investors, look for:
Your perfect angel investor should also be willing to hold on to the investment for at least five to seven years. My advice is to look for an investor who likes to get involved and will advise you when you are faced with tough decisions.
The most difficult part of finding angel investors is actually locating them and making connections. Angel investors like to stay lowkey, but they do enjoy investing in businesses close to home so they can check on things regularly. Try these five tips to meet and close with angel investors to take your startup or small business to the next level.
Once you have created your investor persona, use it to create an engaging pitch and strategy. Remember, angel investors are accustomed to sitting through hour-long pitches and presentations, so take your time and come up with a creative concept. Create a presentation that truly stands out and don't be afraid to make a strong impression. Investors often make decisions with their hearts rather than their heads. Know the ins and outs of your product, boost your confidence levels before your meeting, and create a memorable, engaging presentation.
Angel investors are known to attend business events and conferences looking specifically for investment opportunities. Attend all events, conferences, and presentations that are relevant to your industry, and participate in them as much as possible. Besides networking and meeting potential angel investors, you may also pick up valuable ideas and information you can apply to your own company in the long run.
As I previously mentioned, angel investors like to keep a low profile and they usually operate within private groups and networks. Try to identify these groups and networks, and locate individual members. Once you've identified a potential network or group, you can single out the ones that best match your investor persona. Learn everything you can about these investors, build tailored pitches, and approach them individually. This will increase your chances of closing an angel investor and weed out those that are unlikely to be interested.
The digital revolution has changed many aspects of business, including angel investors. You can now scour the web and find websites dedicated to connecting angel investors with potential candidates, and apply for funding online. Some of these websites are designed to get you meetings with potential angel investor groups, which can invest considerably higher amounts than a single angel investor. Likewise, if an investor chooses not to invest in your venture, they may pass it on to a more suitable candidate who is more likely to be interested.
If you don't have any experience with fundraising, or simply have a hard time doing it, you can always contract a professional fundraiser. These individuals specialize in finding funding quickly for your small business or startup because they already have the necessary connections, but they do result in higher overall costs.
Although they may be hard to find, angel investors can be the solution to startups and small businesses that are struggling financially. The tips explained above will help you increase your chances of meeting and closing angel investors, allowing you to grow your company, increase revenue, and take your business to the next level.
BEAM Dealflow with the focus of simplifying the fundraising and deal-flow processes for both entrepreneurs and investors.
There are 2 key focuses in making this addition: