How to Find Angel Investors for Your New Start-Up Businesses
One form of an angel investor is called public angel investors. They are generally wealthy individuals who contribute small amounts of money to start a business or fund an organization. The other is what is usually referred to as private angel investors. Each has its advantages and disadvantages, just as you will learn below.
Private angels invest in businesses that need help with start up costs or expand. They are usually wealthy individuals who do not have to provide a huge amount of money, which makes it easier for them to believe in the business development of the owners or the company. This can also be appealing because they can take partial ownership or invest in a large number of shares. They normally invest in stages and are willing to wait for a while to see the results of the investment. For more details, you can apply now.
Family offices can also be great sources of private investment. The advantage is that family offices typically have long lists of contacts. As such, family offices can serve as a source of investors for most up and coming businesses. However, this type of investor is also more likely to sell a business to another individual than provide funding. This is because the usual condition of family offices is to always be looking for more business for their clients. Also, many family offices are busy, meaning that they cannot dedicate their entire attention to new business development.
For a successful angel investor, several factors need to be considered before committing. The first is the amount of capital that is required. Although startup costs for most ventures are minimal, an investor may require a significant amount of capital, especially if the business is new or specializes in a certain field. Since angel investors generally receive financing based on their performance, if the business is unable to attract any investors, they will not get their investment.
The next important factor is the check size of the angel investor. Check sizes range from one hundred thousand dollars to several million dollars for most venture capital firms. As such, an investor with a check size greater than or equal to the largest amount of money possible is preferable, although smaller check sizes are just as good as larger ones.
The third important criterion is proximity to the business development. An investor who is willing to invest in a small business that is located near his office is preferable, as is an investor who is willing to invest in a small but well established firm. There are other types of investors who are willing to invest in new or small start ups, but they do not like to take a risk in those types of ventures. Thus, they prefer to partner with those individuals who have already developed a track record of developing successful businesses.
One way to evaluate the personal interest of an angel investor is to meet with them or see if they provide a copy of their Angel Investor directory. This will give you a good idea of their suitability to finance your business plan. If they want to invest in your startup and provide you with a copy of their directory, it is very likely that they believe in your business idea and are willing to put in the necessary capital to make it a success. Conversely, if they ask for money without ever having seen your business plan, it is unlikely they will provide you with capital. The best way to know if you are on the right track is to ask for a detailed description of your business and ask for an amount that you can expect to receive if you are successful.
Of course, some angel investors are uncomfortable lending money based upon your credit history or other outside factors, so you may need to take additional steps to secure angel investment before approaching venture capitalists. These steps include submitting a completed application, working with a certified public accountant and obtaining business valuation estimates from professional real estate appraisers. By following these steps, you will be able to find and approach qualified venture capitalists as you seek capital for your new startups.