3 Game-Plans That Help Secure Funding from Angel InvestorsApr 29, 2021
How to find angel investors for Startups?
When entrepreneurs seek financing for their businesses, they often rely on services from traditional lenders rather than angel investors. For example, most new businesses are financed through bank loans or personal loans.
Depending on where your enterprise is located, however, you could have access to the unique alternative of angel investors. Small Business Consultant Susan Ward explains that “An angel investor is a person who invests in a new or small business venture, providing capital for start-up or expansion.
Angel investors are typically individuals who have spare cash available, and are looking for a higher rate of return than would be given by more traditional investments. An angel investor typically looks for a return of around 25 to 60 percent.” Here are a few tips on how to make your business plan appealing to angel investors:
1) Assemble a Solid Business Plan
The term angel investor makes it sound like you’re getting money from the tooth fairy. But angel investors are often more serious than conventional sources of funding. Never approach an angel investor unless you’re in a position to demonstrate that your business plan is viable. Know your numbers, and prepare accurate projections.
2) Be Prepared to Sacrifice Equity
Angel investors don’t provide capital to businesses out of the kindness of their hearts. They expect profit in return. It’s not unusual for angel investors to request either a majority share or a significant portion of ownership in the business. Unless you’re willing to make such a sacrifice, don’t bother transacting with angel investors. Negotiate the best possible deal, but also expect to share your profits.
3) Cater Your Mission to Their Vision
Angel investors usually have very precise intentions associated with their investment decisions. They often invest in specific communities or support specific causes. The more compatible your business is with their objectives, the easier it is to win their endorsement. Present your business plan in a way that connects with their sensibilities.
If you haven’t had much exposure to angel investors, it’s easy to overlook how much they can benefit a business. But establishing a connection with one can be a tremendous boost to entrepreneurs. Beyond facilitating capital, specialized angel investors can provide knowledge and expertise on how to avoid obstacles that interfere with growth.
Angel investors aren’t easy to come by, but it’s still worth it to explore whether you have access to them during the early stages of launching your business. If you like what you just read from our blog, you’ll love the various informative courses, workshops, and events listed on our websites and social media. Whether you’re interested in personal development, or overall improvement of your business, give us a call at 1 (888) 823-7757 to find out how The RISE Academy can help you break past your daily struggles and start soaring in success. For business development coaching by Richard Martinez, call at 626-202-2291 or follow us on Facebook and Instagram.
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