Whether you are starting a new business or trying to get a creative project financed, you may need to look toward more non-traditional ways to get the funding you need to get started. In recent years, angel investing has become one of the most popular ways for fledgling entrepreneurs to fund their startups.
What is an Angel Investor?
Angel investors are usually successful business owners or seasoned entrepreneurs who are looking to help out the next generation of business professionals. In most cases, angel investors don’t just want to give away their cash, they want to be involved; often becoming mentors to those they invest in. Instead of interest paybacks, angel investors usually collect their initial investment plus after the business is sold or goes public.
Where to Start
There are a number of ways to get in contact with angel investors who are looking for an up-and-coming to invest in. Some of these individuals can be close friends or relatives; others must be sought out through networking. Here are the top 5 places to check out first:
- Friends & Relatives: Family and friends want to see you succeed. Let those closest to you in on the action first; pitch your ideas and ask for advice from those you look up to. At the very least you can get some valuable feedback that can help you perfect your pitch skills or business plan when seeking funding from strangers.
- Small Business Centers: These entities are set up to provide those starting out in business with free tax and legal information, advice from experienced entrepreneurs, and the ability to connect with others who are in similar industries.
- Angel Investment Groups: Angel investors want to connect with new businesses, but they also want to make sure those they are interested in investing in are legit. Angel investment groups offer a wide array of support for both the new investor and the entrepreneur; including, meet and greets, special events, and expert advice on both investing and seeking out investors. Angel groups also allow investors to pool resources and invest in a venture as a group.
- Crowdfunding: Crowdfunding platforms provide new businesses the opportunity to reach angel investors across the globe. Sites like EquityNet allow investors and businesses to network using a specialised platform. Campaigns can be shared across social media and allow individuals to pledge as much or as little as they like.
- Public or Private Investment Entities: Unlike angel groups, these entities are run like a non-profit business and offer grants to individuals seeking funds for new ventures. These can be either private, run by individuals within the community, or they are public, run by the government.
If you are looking for an angel investor to get your new business off the ground, make sure to have all your ducks in a row before heading out to pitch. This means you should have a solid business plan ready, forecasts and predictions calculated, and financial reports in hand. If you are just starting out, you may only have your business plan; this does not mean you are dead in the water, it only means your pitch must show you believe in what you are selling, whether it be a product, service, or idea.
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