How To Find An Angel Investor For Your Business
Probably every small business owner in the world has thought about how their business would be much more successful if only there were more capital invested in its development. In the beginning, it is difficult to collect all your profits (if there are any) and direct them into those fields that need an additional push.
In those situations, the best thing that could occur to a small business is to find an angel investor. But how does that occur? Where can you find an angel investor? Should you even pitch them yourself? Here are some tips that will get you on the right track to find your angel investor and skyrocket your business.
1. Identify Your Angel Investor
It will be much easier to find your angel investor if you keep in mind several things. They usually have an income that exceeds $100,000, they are from 40 to 60 years old, they mostly have a net worth in excess of $1,000,000 and have previous entrepreneurial experience.
Apart from knowing how a typical angel investor is, it is good to know how they can help your business too. For instance, angel investors are usually very active people that enjoy advising entrepreneurs. They can invest up to $150,000, but can also bring more investments if they participate in angel investor syndicates. Also, it will be much likelier that an angel investor will invest in a business from an industry he/she’s familiar with.
They will look for companies with growth rather than ones without. And usually, they do understand that their investment will pay off only after several years. However, they expect to be compensated for their risk.
2. Look Around
One of the most relevant criteria in finding a perfect angel investor for your business is – location. Most angel investors are already active in their field of interest, and they especially love being involved in businesses they invest in. Therefore, they are usually looking to invest in businesses that are close to their homes.
This way, they could talk to the principals more easily than when the business is too far.
3. Networking Is The Key
The most probable way of finding an angel investor is through referral. Usually, angel investors are found thanks to knowing the right person, and that means that networking and being active in your local business and social community must be the step to do.
Business owners themselves might probably be good candidates to invest or to know an angel investor that would like to invest in your business. There are also a lot of business and trade organizations that you can join in order to be better connected with people you’re looking for. Another wise thing to do is to make sure you attend trade fairs and events. The more you participate in this type of events, the more likely it is to get your name out there and meet a lot of people that could potentially affect your business’ growth.
4. One Or Multiple Angel Investors
There are angel investors that invest in businesses entirely on their own. However, many of them have an informal network or syndicate where multiple angel investors pool their resources and share the risks.
Check out for these groups in your community and look in the Business Development Center, Community Futures Office or Economic Development Centre.
5. Check Online
If you can’t seem to find an angel investor community or any angel investor that would be interested in backing up your business, then you should check websites that provide entrepreneur and angel investor matching. You can also have your business proposal funded from a wider audience.
Here are the most important development organizations you should follow : Angel Capital Association (ACA), Gust (formerly AngelSoft) – namely, the world’s largest startup network, Carrefour Capital Connexion, Canadian Investment Network and The BC Angel Forum.
These websites primarily serve to make the connection between startups and angel investors, and they do not provide direct investor funding.