One of the major issues in getting your startup off the ground is the capital. In securing much-needed resources, there are many venues you can take. One of the most well-sought-after startup funding method is by pitching your business plans to angel investors. Why angels?
Angel investors can be your startup’s life-saver
As funding from friends and family rarely get you adequate funding, you need to look for other types of funding. Asking banks to lend you money can be a viable solution, but you will typically need collateral to back your loan. Cash loans and unsecured loans? Not advisable. Crowdfunding? A good option, but it has some limitations. More on this later.
Your next option is VC firms. However, venture capital firms rarely consider less than $1 million in investment.
Enter angel investors; they are often regarded as those who bridge the gap between friends and family and venture capital. They are typically investing in startups, risking their own money for various reasons: Some of them just love your ideas and would like to support you in any way; some others just love your idea and see the potential of your startup in term of return on investment.
You and I know that when it comes to startups, the risks are quite high; angel investors will help your startup to get adequate funding, while in return they either expecting a quite high return on investment in exchange for the high risk associated with startups or simply expecting nothing but your success (they invest knowing that there is a good change for them to lose their money.)
Where to look for angel investors?
If you want to explore deeper into angel investing, this article can give you some ideas on where to find angel investors, such as your local business chambers, your lawyers, and so on.
To help you in your search, I would like to recommend you AngelList. It’s probably the most possible starting point for you. Why?
Well, AngelList is a meeting place for both investors and startups. As a startup, you can browse for registered investors. And those who are registered are no joke: There are many high profile individual investors, such as Jason Calcanis, a creator of Mahalo, Engadget, and some other business and an investor in 25 startups, which include Backupify, Thumbtack, and Gowalla.
You can start by signing up and start filling in your details. You can then follow investors you are interested in and – start pitching right away.
As a startup, you will get a chance to feature yours to investors – so you will need to optimise it: Give the best description about your startup – including your employee details, mentions about yours in the media, and so on – to give investors good reasons to invest in yours. Here’s a good example.
Takeaway
Just like any other startup funding methods, you need to present your business plan to angel investors. Be sure to give your best shot.
With regard to crowdfunding, it is a great way to get people involved in your startup. However, it has one major issue: Your ideas are not protected – someone can steal yours and recreate something similar to your products/services.
Angel investors offer you more than just funding; depending on their chosen role, they can mentor you and give you advices – and we all know both the tangible and intangible benefits of getting advices from those who have been-there-done-that.
So, are you ready to pitch angel investors?
Ivan Widjaya
Angel investing rocks