Seeking Angel Investors and Venture Capital as an Online Entrepreneur

Angel investors and venture capital firms seek out start up companies to invest their funds. They look for entrepreneurs with leadership skills with a unique product or service for the market but lacking cash flow to help them grow. Angel investors and venture capital firms inject cash into a new start up company in exchange for some management control. After all, their money is on the line and they want to make sure it is properly utilized, especially in a down economy. Before seeking out investors for your start up, you need to have a good business plan. It needs to be concise, have minimal jargon, and conclude with an exit strategy.

To prove to any investor that you are serious about your success, you should have an experienced advisor or employee on your management team. It is preferrable they have some knowledge or expertise on the industry the start up is entering. Plus it is absolutely essential that they have experience managing a company through a recession. For an online business, your experienced team member needs to have experience in search engine optimization, search engine marketing, social media marketing, e-commerce, and anything else that is critical to an online business's success.

A typical angel investor will always get an upbeat business plan seeking funding. But its best to create two business plans. One projecting an optimistic outlook and another with projections of surviving in a recession. Having two business plans will show the investors you have thought of every scenerios that could help or hinder your start up. As an online business you will be projecting search engine traffic coming to your site and the strategies that will keep your web visitors coming back and buying your products and services in a recession. Simple ideas like having regular communication with your customers through email on promotions and sending them "how to" guides on using your products and services better will add value and keep your brand in your customers' minds in good times and bad.

Too many start ups concentrate on what is the latest buzz and their intention is to make a lot of money while the buzz is still hot. Unfortunately such business models are not sustainable especially in a recession. Investors had poured tons of money into online start ups during the dot com bubble and they have learned their lesson. They want someone that is passionate about their idea. The passion proves to them that there is long term viability in investing in the business versus eventual failure as the dot com bubble have proved in the past. In a recession it can be hard to think about passion when you are constantly figuring out how to pay the bills. To the investor this is the proving ground for the entrepreneurs that quit and fail versus those that prosper and succeed.

Investors likes methodical entrepreneurs. They want to know you have thought of every possible situation your business will encounter in the market. Plus it helps to show you have done your home work on financial projections for cash flow and revenue. It is also important to show you have the guts to execute your business plan. Be the expert of your field and show that you have indepth knowledge of your competition, supplier, customer, product, and service. Start by doing internet research. The federal government web sites are good places to start looking for industry insights and projections. From there read through your competition's SEC filings looking for deficiencies in their competitive advantage.