If your business is looking for a pilot angel investor, think about whether it makes sense to present your plan to a group of people and assume that at least one of them will approve it? In fact, many angel investors meet in different places with the same pitch or presentation is one of the approaches that are less productive.
The following are the five main things that should be known to find the right angel investor for your pioneering efforts:
- Angel investors invest in people more often than investing for the idea. That means they have to get to know you, or someone they trust who really know you personally (through a warm introduction for example). To get the maximum credibility, start waking up the network to potential investors that a strong and close relationship built up a few months before they invest. They also prefer an experienced entrepreneur in starting a business, and has experience in the field of business into motion efforts. Your business model may be interesting but if you are still green in this arena, your investment request may not be approved. In this case, you need a partner who has a deep knowledge of the business and track record in building a business.
- A complete business plan is always needed. Maybe your friends and family will give you money without a business plan, but angel investors expect a plan that ‘real’. All professional investors know that entrepreneurs who start a business without a written plan almost always will fail. Do not forget to clearly formulate a problem you want to solve through your efforts, before you give the solution in detail. Explain well about the business model and your exit strategy so that investors will find out how you can make a profit and how and when they will get their money back.
- Angel investors wishing to engage directly with your business team. This means that they are generally only interested in local opportunities. That will not help you solve the problem or reduce the burden of your problem with blindly sending emails and following up 60 thousand investors around the globe. If there is no investor in your area who are interested or experienced in your type of business, you could just move to the area where investors are more experienced in this field. A relevant issue with this is the amount of investment you need. Angel investors tend to limit the size of the largest individual investment of 250 thousand dollars or less. And even in the rare groups that they consider his request because the number reached one million US dollars. If you need more, you have to focus on the area of venture capital.
- Financial forecasts and opportunities in the business field. Investors will not help people who are not trying to persistent or unwilling grounded in reality. This is some default rules. Projected income fifth year you better be between 20 to 100 million. Small amount of funding also signifies the return of the small and large quantities are usually not credible. Secondly you need a large and growing market to compensate for the high risk financing. This rule includes a projection that exceeds a billion dollar opportunity with the least percentage of double-digit growth. Smaller amounts can easily be used to finance a realistic and profitable business but it is usually less attract investors.
- Scope and character you have to be really clean. Certain business sectors have a high failure rate and the usual avoided by most investors. This includes food service, retail, consulting, work at home and telemarketing. Also, do not expect investor enthusiasm for gambling sites, porn sites, gaming, or debt collection business. Angel investors are also ordinary people. They expect us to understand their motivation, respect their time and shows your integrity in every step. Maybe they will not respond well to pushy sales tactics, information overload, or bribes.
If you are turned down for the first time, do not give up. And do not expect to get an answer to the reason for the rejection of most angel investors. Maybe they will tell you to call you later, after you have completed your product, get some customers or other achievement.