How to Access Angel Investor Funding For Your Business
In the aftermath of the U.S. financial implosion of 2008, venture capital funding shriveled like an earthworm stranded on a sun-baked sidewalk. Bad news for companies looking to get funded. It was even worse news for those underperforming portfolio companies forced by their venture benefactors to walk the plank.
Now for the good news. “Early stage” money provided by “angel” investors was and is still available. As opposed to venture capital, which traditionally refers to investments of seven figures and above used to get companies to the next level, early stage angel investment helps out companies that are truly in near-embryonic stages of development. This article offers a few tips gathered from angel investors themselves on how best to go after this early money.food distributors, beverage distributors, convenience store distributors, convenience store suppliers
1) Investors love scalability. In other words, is the business something that’s easily replicated and distributed to a widely dispersed potential market? Pharmaceuticals, medical devices, and computer software fit the category, though they’ve by no means got it cornered.
2) Meet and greet. Even if you don’t think you’re ready to make a pitch for funding, start meeting investors in person and speaking with them. You’re selling yourself as much as your idea, and the greater comfortability level you can establish, the better off you’ll be. As one angel investor put it, “nothing’s going to replace face-to-face.”
3) Use multiple forums. And just where do you find these angels – on the head of a pin? While they may not advertise on prime time television, these funding sources aren’t at all elusive if you know where to look. Usually, they’re as close as your local or regional technology council meeting. Also sign up for venture fairs and participate online where angel investors gather.
Online tools such as those on Angelsoft.net even allow you to plug in information about your company or idea and match it to angels whose criteria you meet.
4) Have some skin in the game. Maybe even some flesh. Your commitment is pretty much beyond question when they hear you’ve taken out another mortgage against your home to finance your company’s operations and growth. While investors are ready to take their lumps on investments that don’t pan out, they know success is much more likely when the fundee’s own dollars (and the fundee’s friends’ and family’s dollars) are on the line.
Unlike venture capital funds, which are pooled money from several investors, angel investors are individuals. Albeit very wealthy ones. If they like your pitch and invest, they will expect a significant return; but their terms and requirements are generally regarded as less onerous than venture capitalists’. Angel investors may not necessarily be angelic, but they are people who want to see you succeed – so ask questions and get advice on how to make your idea more saleable.
Akweli Parker is the founder of Digital Delta Media LLC, a communications and coaching firm dedicated to helping individuals and businesses to craft irresistible messages.
Learn more about how to make polished pitches by visiting his Web site at http://www.digitaldeltamedia.com.