An angel investor or angel (also known as a business angel or informal investor) is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors organize themselves into angel groups or angel networks to share research and pool their investment capital.
Here are 10 action steps you can take to find angel investors for your startups.
- Don’t start your search looking for any investor, begin by looking for the perfect angel
- The best angels you will find are the ones who know you personally, or know a member of your team or advisory board
- Identify the people you want to engage and then see if you can get to them via your network using LinkedIn.
- Give them a good reason to invest.
- Search private equity websites, trade mags, financial papers, and competitors’ sites
- Call a professional venture capitalist and ask if he or she is aware of an angel investor group.
- Look at the “Principle Shareholders” section of initial public offerings (IPO) prospectuses for companies in your area. This will tell you who has cashed out big.
- Get an invitation to present to a local angel group. Most won’t take cold calls, so you’ll need to wrangle a referral.
- StartupNation.com offers a soup-to-nuts array of great startup information, including angel investor insights, developing an elevator pitch, and much more
- Submit your application to the leading online website national databases of angel investors
- Find the right investment advisor, or member of your advisory board, and the “match-making” will happen.
- Being referred by someone with whom an angel investor has already worked with, is the easiest way of getting connected to him.
- There are better chances of interacting with an Offline angel investor since he is known through some referral or some business association or via some meetings and fairs.
- There are some good books out there to help, like “Attracting Capital from Angels”, by Brian Hill and Dee Power.
- Raising money is hard, but don’t get discouraged. Take every “no” you get as an opportunity to learn something and refine your idea. If you can’t get someone to say “yes”, figure out what you need to change or just go out and prove them wrong!