Nowadays, it is almost impossible to find a startup that at some point didn’t need additional funding. In other words, it is highly probable that your startup will face certain financial challenges that could be resolved by bringing angel investors on board.
First of all, what is an angel investor?
An angel investor is an individual who is usually experienced in the world of business, has a large stable income and is willing to invest in up-and-coming companies with a share of the profits afterwards. This type of investor is often the best investor for young companies as, unlike seed investors, he can invest a significant sum thus boosting your company’s chances for success. Angel investors are also one of the only ways that young entrepreneurs have of making their dream (or idea) come true.
While it may seem easy to get a clear picture of who an angel investor is, it may be slightly more difficult to find one. As you understand already, this is a crucial moment in your company’s development, so you should take your time and look for the right investor.
Here are some tips on finding the perfect angel investor for your project.
When looking for potential investors, your best bet is to search locally. Most investors are looking to invest in companies in their areas, which means that potential investors might be even in your neighborhood. It is up to you to talk to the people you know, to try to get new contacts and referrals and ultimately meet the right investor. As Casper Ravn-Sørensen, businessman and angel investor himself, points out, investors are sometimes willing to reach out to young companies, but it is up to you to present yourself and be on their radar. Remember, networking is everything!
If you can’t succeed in meeting an investor in real life, you can always turn to the internet for help. Angel investing is a widely-spread practice in the startup world, so there are numerous sites dedicated to matching you and your potential investor. Sites like AngelList, the BC Angel Forum or Quora will help you with your search. If all fails, remember that social networks like Twitter and LinkedIn have a myriad of business users and you might just find someone who is willing to invest in your idea.
Get to know the potential investors
Once you have found some potential angel investors, the next task is to get to know them. You should discuss multiple crucial topics such as the part the investor will play in your company, his level of involvement or his financial expectations. If you want to find the perfect investor, you need to be on the same page with him. He will likely want to be very involved in your company, which is why you’ll want someone who understands your vision. Furthermore, investors like Casper Ravn-Sørensen wish to invest not only their money, but also their knowledge and network, so having similar visions is certainly a plus.
Have a clear business plan
When the time comes for you to present your company to a potential angel investor, you should have a clear and well-developed business plan. Investors will bring in significant sums, therefore they’ll want to make sure that your business is a worthy investment. You should work on the perfect pitch, you need to spark their interest. However, you need to keep your plan realistic and well thought-through because this is the only type of plan that will work with serious investors. If you try to impress them with impossibly optimistic expectations, they will only face disappointment later on. By keeping your business plans realistic, your investors will understand that your business is serious and will want to be a part of it.
Consider your investor a great long-term partner
While all the tips listed above are important, the most important advice is to follow your heart and be confident. Your angel investor is your long-term partner and you should get along. Even if someone is perfect on paper, if you don’t work well together in real life, the investment is not going to work. Casper Ravn-Sørensen can tell you from experience that the key is matching your business with the right investor and always follow your dream.
With these tips and with confidence, you will be able to find the perfect angel investor for your company. Numerous startups got a new life after investments from angel investors, so you too should consider this if your business is in need of financial support, and more importantly knowledge and experience from someone who’s already made it in the business world.