Angel Investors - Advice From Both Sides
In their own voices, here’s the advice several experienced entrepreneurs and angels give to entrepreneurs like you:
* “No matter what you think, it always takes twice as long and costs twice as much.”
* “Most entrepreneurs fail to realize the best source of financing and the cheapest is customers.”
* “The challenge is to get angels excited about the business concept, which is hard since they might look at hundreds of possible deals.”
* “Get a seasoned lawyer who has been through capital equity financing. The closing stages of raising money are a legal process, and a bad deal in earlier stages can affect your attractiveness to investors in later rounds.”
* “As a woman entrepreneur, I found little discrimination in the world of angel investing. Having a good business plan is more important than gender.”
* “Ask for help, even if you have to hire someone to make some introductions. Angel investors are a small club and entrepreneurs need an introduction to get a deal done.”
* “Use informal networks to be referred to angels…it vastly increases the chance that your business plan will be reviewed.”
* “Only 1%-2% of business plans to angels or VCs ever receive funding. Read the right books, learn the financing concepts, and be fully prepared to present the concept well. Incomplete business plans are unacceptable in today’s competitive environment.”
To learn more about how angels think and how to attract them to your business, see the profiles of over 20 angel investors and read articles written by angels on the Angel Investor News website at: www.angel-investor-news.com.
Source: “Investors In Your Backyard: How to Raise Business Capital From the People You Know,” by Asheesh Advani
(Side)
Finding An Angel?
On average, angels are 47 years old, have a postgraduate degree and management experience in an entrepreneurial venture.
What Do Angels Do?
* Angels seek investment opportunities in a company with high-growth potential, proven management and a business plan that includes information about the company, its management team and its markets that will enable the assessments of potential value.
* Angels seek above-average returns.
* Angels invest in companies seeking between $50,000 and $1 million.
* They prefer to finance manufacturing or product-oriented ventures, especially in the high-technology fields.
Source: Missouri Venture Forum, “Valuing And Structuring Seed-To-Early Stage Businesses” seminar.
What Investors Look For
Enthusiasm of the entrepreneur.
Trustworthiness of the entrepreneur.
Sales potential of the product.
Expertise of the entrepreneur.
Liking the entrepreneur upon meeting.
Growth potential of the market.
Quality of the product.
Perceived financial rewards (for investors).
Niche market.
Track record of the entrepreneur(s).
on May 23rd, 2007 at 5:35 am
[…] Angel Investors - Advice From Both Sides […]