If you are currently trying to raise capital for a startup or existing company from Angel Investors, there are a few important things that you should know. First of all, you need to know that angel investors are reluctant to fund startup businesses that have no financial history whatsoever. For this reason, you need to come up with strategies that will help you get funding for your business. Here are some few useful tips on how to raise startup funding from angel investors.
- Start the Big Search
Angel investors can be found online. This is where they form “angel groups”, and pool their investment funds which are released every time an entrepreneur submits a proposal. There are also “private” angel investors who are better because they not only fund your business, but also, they offer guidance and mentorship. Decide on the most suitable option for you and your business.
- Write a Compelling Executive Summary
Most investors will want to take a look at your business plan. However, it’s likely that they will not read the whole document. In this case, ensure that your executive summary is eye-catching and impressive. Give the investors a brief summary of how you intend to use the funds, the amount of returns you expect and your future plans. Don’t sell yourself short on this one. Write a great summary and see the results.
- Meet up with the Angel Investors on a Regular Basis
As much a regular communication is important, you must try and meet up with the investors as much as you can. The “face-to-face thing” works for most people because it’s not only a good opportunity to sell your idea, but also, it’s a great chance to sell yourself. It’s also great opportunity to build a long-lasting relationship with the investors.
- Invest in a Fast –Growing Business
This is one of the most important tips on how to raise startup funding from angel investors. This is because; investors want as much benefits as they can from any business they invest on. No one wants to risk losing their money in an unpredictable business venture. Thereby, you need to do your homework properly and carefully. There is plenty of information on the internet about the fastest growing businesses. You can also look for advice for business consultants. In such a case, investors will be more than happy to fund your business and even offer mentorship for as long as you need them.
- Focus on developing an Expert Management Team
In as much as the investors would want to fund your startup business, they need an assurance that their investments are handled and managed by well experienced personnel. Having a great idea is not enough for them because they want to “invest in an expert team” too. You need to outline each person in the management as well as their roles in the company. A good team should be able to execute plans and implement new ideas, which is essential to a startup business.
- Don’t Invest Too Much
As stated earlier, investors feel uncomfortable when funding startup businesses. For this reason, you need to ask for an average amount of capital. This is because too high a fund may raise a red flag and thus an investor might not agree to your terms.
- Be as Transparent as you can be
Angel Investors love honesty and transparency from the entrepreneur. You must provide all the legal documents, references, grants, contact information, social security numbers and other important details that will prove to the investor that you are clean. If you appear shady in any way, then you might as well say goodbye to the funds.
Now that you know about how to raise startup funding from angel investors, utilize each and every resource you have to ensure that the angel investors are confident enough that you are the right person to handle their funds. It requires a lot of efforts and determination.