For those of you who are new to this idea, angel investors are normally an individual or small company with a high net worth who invests their money into private companies which are typically at the early stages of development. Since it is very difficult for new business owners to get a start-up loan, these investors come into play here. More than likely if you’re reading this article, then you fall into this category.
Before showing you how to find an angel investor, it’s important to note that investors normally expect a higher return on their investments than a typical investor. But at the same time, they will offer more insight and are normally much more willing to help new business owners get a foot-hold in the marketplace. So now the question remains, how to find the best angel investor for your business? Here are some important facts to keep in mind.
Stay Close to Home
One of the most important steps to securing an angel investor is to try and find one who is close to the area where your business will be established. Although this is not a requirement and even not an option at times, if you can find an angel investor close to home, then it will help make it easier to woo him or her into dumping funds into your company.
Friends and Family
It’s best to keep this section brief as you’ve probably already considered or even tried this option. The subject of using friends or family as an angel investor is one of great controversy. However, I strongly advise against it. Here’s why. People who borrow money from friends or family have a difficult time establishing the boundaries between personal and business relationships. If this is the only course of action available, then I strongly suggest a contract that clearly details this “fine line”. That will make the transition easier. But be prepared for your relationship to change, even at family reunions.
Impress Angel Investors
If you decide to look for angel investors outside of the family, then you are going to have to woo them with more than a keen business plan. If you can somehow get a working prototype of your new company, then you will be able to accomplish this. But that feat is easier said than done. However, angel investors want to be able to see with their own eyes that their investment has a potential for a return.
Let an Angel Be a Part of your Company
After careful research and finding an investor who you love, here is a good way to prove yourself to them. Let them come in and help you. Most angel investors love helping new business owners with this aspect as they love the challenges that a start-up business endures. This is a good way to earn their respect and show them that you’re for real. Once you have worked with and angel investor and grew your business to the next level, you would have accomplished what most business owners strive for. The next step is to continue to grow your company until your ready for your next round of financing.
My name is Gary Trump and I have been raising capital for over fifteen years. I now guide entrepreneurs on how they can raise capital for their business at [http://www.freecapitalraise.com/angel-investors-vs-venture-capitalists/]
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