If you are a new business owner wondering how you'll ever raise the money to get your business up and running, you need to know about angel investors ...
For individuals looking to obtain funding for their new business to get off the ground, difficulties finding sources of money can be an obstacle. Financial institutions and investors seem to need the business to be profitable before they'll consider lending money, but when you have yet to open your doors to the public, giving these sources the figures and proof they want might feel impossible. New business owners might start to wonder how they'll ever raise the money to get their business up and running.
Enter angels. An angel is a private investor, generally a successful current or former business owner. Angels have been an important source of startup revenue for many years. Angels often provide much more than simple cash. Their expertise and industry connections can prove quite valuable. They want you to succeed and will work hard to help you do so.
For all their positive attributes, angels should not be seen as smiling benefactors, showering money and advice with no thought of their own needs. Rather, they are shrewd investors who expect a significant return on their investment.
While angels may be good sources of funding for your business, they're also a cautious bunch to deal with. The dot com boom and bust of the early 90s affected business in a number of ways and many angels suffered the effects of that time. Nowadays, angels are just like other investors, in that they want to see data on paper, which means you'll need a solid business plan to present them. They'll also want to see some method of how you plan to repay them for their generosity, so outline a good exit strategy that shows when and how angels will receive their money.
Finding an angel used to be mostly a matter of luck, as they preferred quiet dealings with friends or referrals. They did not advertise their services. This is still the way that a majority of angels prefer to conduct business. However, in recent years angel groups have begun to spring up. It is now estimated that the angel groups handle approximately 15% - 20% of all angel work.
Sometimes you are approached by a possible angel investor. This happens only in rare circumstances, generally when the angel is a friend of a friend. This is often an easier "sell," as the angel's curiosity has already been piqued.
Most of the time, you will have to approach the angel directly. The angel groups generally have a series of specific steps that new submissions must follow. Most often, you will query the angel with a copy of the Executive Summary from your business plan. If your query is accepted, you may be immediately invited to make a presentation, or there may be additional screening steps.
In either case, if you make it through screening, you will eventually have to make a sales pitch in person. While banks are strictly interested in the numbers, angels usually invest in people rather than figures. This does not, however, mean that you can let the numbers fall aside. A well-written, professional, and, most importantly, accurate business plan will be the basis of your pitch. Angels are interested in maximizing the return on their investment. However, you should also expect to spend some time talking about yourself, selling the angels on not only your business concept, but on you as the best possible person to run it.
Angels are an important source of initial start up capital. In most cases, they have been where you are, and they can recognize themselves in you. That is, perhaps, your biggest asset in selling your idea to an angel. Sell the product, but also sell yourself. The right mix of personality and solid figures will ultimately seal the deal.
Earn $200+ per day taking simple photos in your local area! Almost anyone with basic computer and digital photography skills can start and run this business successfully. This is a virtually unknown photographic business opportunity ...
Business Start Up Capital - Common Questions
You may have a great idea and have finally decided to take your dreams and make them a reality. Maybe you want to try your hand at owning your own business, or maybe you'd like to be your own boss. You... Personal Financial Information - A Requirement For Business Startups
If you have set your sights on starting up a business to call your own, and would like to get a business start-up loan to help you do it, then you will face some challenges. The fact of the matter is that... Raising Start Up Capital - Involving Friends And Family
When you have a great idea and are thinking of starting up a business, friends and family are the people who have probably heard the most about your potential venture. When it comes time to raising start-up...
Receive free practical Business tips delivered to your email box with contributions from business writers, experienced business coaches and trainers, marketing experts and successful business owners. Also receive free business resources as our gift to you.
Email Instructions:
Fill-in your First Name and primary Email below to claim your FREE gifts and stay up-to-date with the latest exciting news and information on Business!
Your privacy always comes first and your email address is never shared with anyone ever.
Business Startup Facts & Tips
When creating a start-up business, there seems to be a million different things that have to be taken into consideration. Finding money, perfecting a service, product or line, making important connections, and other tasks create a bewildering array of decisions that need to be made. One such decision that shouldn't be overlooked is the type of organizational structure you'll be using. There are multiple kinds, but all of them are chosen on the basis of taxes, management direction, and matters of legal liability.