How to Locate Angel Investors
Angel investors seek to invest in promising, early-stage new businesses. The term "angel" refers to the fact that these investors are often willing to take chances on borrowers who have been turned down for financing from traditional lending institutions. Typically, an angel investor is a high net worth individual seeking to invest in his area of expertise. Financing arrangements with an angel investor almost always entails granting him a significant equity stake in your business.
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Instructions
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Instructions
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Review and refine your business plan. Before attempting to make contact with potential angel investors it is paramount that your business plan be detailed, coherent and complete. You need to be fully fluent with all projections, numbers and analyses within your business plan and be able to discuss them effortlessly with angel investor candidates.
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Attend as many business networking events as possible. You never know where you will find your angel investor. Increasing your contacts within both your niche as well as the aggregate finance community directly translates to greater odds of finding your angel investor.
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Develop and perfect your pitch. Potential investors will immediately sense your level of confidence in your business idea and your ability to sell it with passion. Angel investors are looking for you to hold a deep conviction about your business idea and to have the ability to sell it to the general public. Learn from each rejection and follow up with potential investors who declined financing to learn what they found lacking in your proposal.
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Go where angel investors tend to congregate both online and within the physical world. Conferences, trade shows and other meetings pertaining to your business niche are ideal forums to make contact with angel investor candidates. Forums and directories abound online (see resources) that specialize in connecting early-stage businesses with interested angel investors.
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Tips & Warnings
Research each individual angel investor candidate so that you can customize your pitch to their specific needs. Always pay attention to details like your appearance, the professionalism of your business cards and marketing materials, and your promptness in replying to queries. Never give up. Rejection is par for the course when it comes to the quest for early stage business financing. Although it may at times appear that there is no available money out there, the statistics show otherwise. According to the University of New Hampshire Center for Venture Research, $19.2 billion was deployed by angel investors in 2008 (reference 1).
Be careful about sharing too much information about your business plan without executing a non-disclosure agreement. Always seek the guidance of qualified counsel before signing any financing documents no matter how eager you are to finalize the deal.
