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Finding Angel Investors

Finding angel investors is definitely one of the most critical stages for an entrepreneur. Finding angel investors is a combination of persistence and the use of right techniques. You need to find angel investors who would be the right fit for your kind of business and possess the right kind of credentials to invest in a business. Lastly, you need to know the art of finding angel investors.

Angel Investors have different profiles and all of them have different requirements and expectations from the business they invest in. Hence you need to find angel investors that will have related experience and expertise in your type of business. These types of angel investors can not only invest money, but also bring in the required relevant expertise and experience to your business. The method to find angel investors has evolved over the years and with the internet and social networking communities all around, you need not really strive hard to find angel investors. Lastly, even with these tools available, you might not be able to find angel investors easily, hence it will really boil down to your persistence.

Let us take a look at how you should go about finding angel investors:

  1. Know more about angel investors
  2. Your task of finding angel investors becomes easier if you know what should be the ideal profile of an angel investor. Ralph Kroman of WeirFoulds LLP has listed the following criteria of an angel investor and you may want to find angel investors accordingly:

    An angel investor will:

    • Have an annual income in excess of $100,000
    • Be between 40 and 60 years
    • Have a net worth in excess of $1000, 000
    • Has proven records of consulting and being on the advisory board of business ventures
    • Has proven expertise and knowledge in the specific line of business for your company
    • Source all deals through referrals

    According to Allan Riding, an expert on angel investors in Carleton University, you should ideally find angel investors who focus on the export and growth potential of an entrepreneur. You must ideally look for an angel investor who is patient and willing to be with you through the rough patches you will encounter as an entrepreneur.

  3. Find Angel Investors Closer Home
  4. You should find angel investors who are willing to invest in entrepreneurs who are located close to home. This is because good angel investors would want to be frequently in touch with the entrepreneurs to keep a tab on how the business has been going. This makes it easy for the angel investors to drop by and personally evaluate how things are being conducted. According to Jim Orgill, the managing director of the Advanced Technologies of the Business Development Bank of Canada, “An angel wants to be nearby so they can drive over to talk to the principals”.

  5. Find Angel Investors Through Networking
  6. Finding angel investors through networking has been a novel and powerful method in the modern era. The Internet has opened several avenues and you can find angel investors with the help of various social networking tools. You need to mix with the right people and participate in the trade fairs and other business events in the town and you are likely to find angel investors. You can also think of finding angel investors by joining the civic and community organizations instituted in your city.

  7. Find Angel Investors that Invest in Groups
  8. While some angel investors may invest in an entrepreneurship from their own funds, some angel investors may also choose to operate as a syndicate. The merit in the approach of the latter is obviously a greater amount of funds and a higher degree of skills, knowledge and expertise. You may find angel investors who invest in groups from the Economic Development Centre or the Community Futures office in your locality.

  9. Leverage the Internet
  10. You may be able to find angel investors on websites that specifically perform an entrepreneur and angel investor matching. This enables you to find out the most suitable angel investor for your kind of business. Finding angel investors on the internet has been the latest fashion these days.

    However, you must realize that though finding angel investors is an important step, having a sound business model is also of prime importance. In fact, it is one of the most critical things. A business model is the primary plan or design of your business. An angel investor will decide whether to invest in your business or not primarily based on your business model. A business model must clearly define how you are going to operate your business and how is the revenue going to come. The business model will also give an idea of how sustainable our business will be from a long-term perspective. An angel investor, whose primary motive will be to earn profits, will critically evaluate these factors. Hence finding angel investors can be easy or difficult depending on your business model or plan.

    An equally important factor in finding angel investors is your expertise and knowledge in your chosen business area. Your business will thrive or sink depending on how adroit you are at handling the business. The angel investor will rightfully demand a certain level of prior experience and skills in operating the business. Though angel investors, these days, are actively involved in the day-to-day operations of a business venture, their knowledge, experience and skills would not be sufficient without a certain degree of business acumen on the part of the entrepreneurs.

    Last but not least, the entrepreneurs must be able to convince the angel investors of lucrative returns and live up to their promises. Finding angel investors will depend on whether the entrepreneur is able to sell the plan to the angel investors by giving them a sound and realistic plan of good returns from the business. Usually angel investors expect very high returns from a business and it is the onus of the entrepreneurs to really match the expectations of the angel investors. Finding angel investors is just the first step of a long journey.