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How to Find an Angel Investor

Updated on March 18, 2013
Source

Have you been praying for cash to fund your business, idea or invention?

Do you have a great business idea but no budget to fund it?

Do you want to grow your business but only have the cash necessary to keep it afloat?

Have you been praying for a miracle to help launch your invention, product or business?

It’s time to stop praying and put your faith into action. An angel investor may be just what you need to give your business, invention, innovation or product the wings it needs to fly. If you own an early stage or start up business then an investment from an angel is something you should seriously consider.

Why You Might Need an Angel Investor

Do any of the following apply to you or your business?

  • Running out of savings
  • Can’t get any more cash from family or friends to fund your business
  • Living on credit cards
  • Using credit cards to fund your business
  • Got turned down for a Commercial Loan
  • Got turned down for an Small Business Loan
  • Need help to take your business to the next level
  • Don’t have the resources to grow your business
  • Have orders coming in but have difficulty filling them

Above are only a few reasons why you might need an angel to invest in your business however there are more. Many people that reach out to angel investors are often new entrepreneurs or have new business ideas that not only require funding, but also access to experience business people, business contacts and additional infrastructure like space or equipment. Angel investors can help with some or all of that. Keep reading to learn more.

What Are Angel Investors?

Angel investors are high net worth individuals or a group of individuals that are willing to invest their own money in early stage or startup businesses. They are experienced, knowledge and business savvy. They’ll want a piece of the action if they decide to invest in your business. In exchange for their expertise and cash, you must be willing to give up a percentage of ownership, shares, seats on your board and potentially some decisions. They do this because they want high returns on their investments.

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What’s In It for the Entrepreneur, Inventor or Start-Up?

Besides their cash and experience you can potentially get the following benefits;

  • Low interest rates compared to typical bank loans or credit cards
  • Flexible funding arrange
  • Flexible business agreements
  • Their business contacts and relationships

What do Angels Invest in?

The number one thing that most angels look for is a significant return on their investment however they are also interested in the following;

  • Early stage or startup businesses
  • Invest in thefields of their expertise
  • Innovative companies or business ideas
  • Unique opportunities

What Type of Businesses Have Angels Invested In Before?

They invest in all kinds of businesses from technology to service and even online businesses. Angel investors are responsible for the growth and success of the many small businesses and ideas. If you are living and/or running your business on credit cards don’t feel bad about yourself. If the founders of Google did it then you can too. Before receiving an initial $100,000 angel investment Larry Page and Sergey Brin financed with what we’ve come to know as Google with credit cards.

What do Entrepreneurs or Inventors have to provide them with for consideration?

All angel investors are different. You will have to do your research to learn about their specific requirements but all of them will require a business plan or proposal. It should show the following;

  • Why you can make it happen – first things first, they will want to know, love and like you then they might consider your product or business. Angel investors are people too. They want to do business with people they can trust. If they can’t work with you it doesn’t matter if your business or product was the best thing since sliced bread they won’t fund you. Do your research, connect with angels that you can work with and more than likely you’ll be a perfect match.
  • The market opportunity – you must clearly demonstrate that your business must fill an unmet need, want or demand to be highly attractive to an angel investor. The market size, the number of people or firms willing to buy your product or service must be large enough to make a profit.
  • A good understanding of your competition – you should know who they are, how much market share they have, why they are successful and demonstrate their weaknesses. Your plan should show how you will exploit their weakness and take market share away from them. If there are no competitors then you must demonstrate how you will educate the public about who you are, what their unmet need is and why you are the answer to their problem. Above all things know why you are better.
  • The money sides of the business – angel investors need to know what you plan on doing with their money. Make sure your projections are detailed and include sales, as well as expenses.

Your team is capable for the task – your team should not only have the knowledge, skills and experience to reap a large return on the angel’s investment they should also have passion for your business or product. If you are just starting out and having hired your people yet remembers angels are looking for teams with stellar credentials and experience coupled with

Get Clear, Get More Details and Get the Cash to Grow Your Business

Where can I find an Angel Investor?

The first thing you need to do is be public about your need for an angel investor. Get out there and network your buns off. Talk to your banks, other small business owners, accountants and lawyers. You never know who they know until you ask. Leave no stone unturned when looking for an angel investor. Networking with people you know is best because they can provide a warm introduction. After you have spoken to your network, then look outside your network.

The following places are good sources to find angel investors;

  • Small Business Development Centers (SBDC)
  • Local Colleges & Universities, particularly business schools
  • Business Incubators – check out the National Business Incubation Association at ww.nbia.org
  • Angel Networks – these are a group of high net individuals that bound together to fund early stage businesses. One of my friends and alumni belongs to one called the Hyde Park Angels. There are bound to be angel networks in your own backyard.
  • Chamber of Commerce – local and regional ones may have a list of angel investors in your area
  • Associations – look into sites like The Angel Capital Association. They list angel investors by state. They also are a good source to learn more information about angel investors.


Source

Your Business May Not Require A Miracle

Perhaps you are praying for a miracle, when all you need is an angel. Let's face it; angel investors help more than 40,000 entrepreneurs, inventors and small businesses grow each year. Now, it’s your turn to make your business soar. Find an angel investor and give your business or idea the wings it needs to fly. Get started today.

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