Any good idea to reach its true potential requires careful planning and ultimately proper execution. One important step is the whole process is capital. To set any business up and running requires money. For an entrepreneur, the major source of this capital is from raising funds and quality investments. Angel Investors are invaluable for any start-ups.
Angel Investors can be described as a group or network of affluent individuals, maybe lawyers, doctors, bankers, experienced business owners, etc, who invest in start-ups and early stage companies in return for some equity. The majority of start-ups fail within the first five years of their operations. This makes the job of an angel investor even more invaluable. Money is important. These angel investors don’t invest in any start-up that catches their fancy. Considerable thought process and decision making goes when deciding to invest as they want their investment to be ultimately fruitful at some level. Therefore, attracting angel investment becomes a formidable task for entrepreneurs.
Investors fund people, not ideas. Therefore, to attract investments, line up an enviable team of persevering and talented people. Your team is your backbone; a poor team will not help your cause. It is a good idea to have a few experienced people as a part of your team, as investors value industry experience.
Technology is at its peak today; if you refuse to be a part of it, nothing good will come your way. No matter what your business is all about, it is extremely important that you have a clear-cut, decent website for your company. Hire experts so that your website stands out and makes people curious about your company.
Although a good idea is what makes the company, it alone does not define it. To attract considerable investment, have a full-proof business plan along with an exit strategy and which highlights your plus-point against your competition.
Just as you require a business plan, a substantial financial model also plays an important role to attract investments. Remember to include best-case and worst-case scenarios to add credibility to your financial model.
Make sure that you do invest some of your own money into your venture. This goes a long way to appeal your investors.
Customers are the ones that ultimately decide the fate of your company. If you possess some paying customers or clients, it is quite impressive to the angel investors.
Some angel investors might suit your needs while some not. Thus, even angel investors need to be chosen carefully from your end too, for these investors demand a certain portion of equity in your company.
Networking is the traditional and a sure way to meet angel investors and come across region specific angel investors. For example, in India itself, we have a Mumbai Angel network or even a Bangalore Angel network. But remember that is it important to first form relationships with these investors before you take and utilise their money. If some investors don’t work out, keep looking and find some more.