Everything You Need to Know about Angel Investment Pt 2
The Pros of Leaning on an Angel Investment
A small business having some revenue, but unable to get funding from a traditional source, would normally have better chances from approaching a seed investor. In addition, these rich people usually offer more favorable terms for the average business.
Many times, an angel investor would also give business advice to early ventures. They commonly have knowledge about running a business and about your chosen niche, which means they can often be of use here as well. It helps that it is in their interest to see your company succeed.
Besides, private investors also tend to have valuable contacts which can help a business. In addition to giving funds and advice, they would also be able to connect the investee with potential employees and customers, as well as other potential investors. They could also help a business meet and arrive at better terms when dealing with attorneys, banks, and accountants.
How Does a Business Find an Investor?
You could perhaps enter a random bank and apply for and acquire a business loan in an easy manner. However, learning how to find a private investor who is interested in a business venture would generally take a longer time just seeking. There are many business owners who ask for help from their friends and family, who qualify as angel investors. Even your own folks could potentially be open and lenient enough to serve as business angels in this way.
Talk to another business owner, and then the Chamber of Commerce in your area. They might know about local angel investors that tend to work with small businesses in your segment. The helping capacities of investors vary, but these people also prefer starting small, as well as to see how a business is doing before actually sweetening the pot.
What do Business Angels Seek?
When a business approaches seed investors, they would ask for lots of information concerning the primary business plan. You would have to convince the “angels” that making an investment is a sound and lucrative option for them. Every such business owner has to show signs and proof of competence, as well as growth potential. This means that when one meets with an investor, he or she would likely need to pitch their central idea from top to bottom. Through such a pitch, they would need to properly tell the potential investor why their business would be a worthy investment. In the event an investor gains and holds interest, he or she would then want to see the following documents concerning your business.
- Business plan
- Market analysis results
- Past and present financial statements
- Marketing plans
- Financial projections
- Record of customer growth