Angel Investors.
Many small businesses looking for financial help from an “angel” often turn to individuals willing to invest in promising, start-up opportunities. Angel investors can be a good funding source to consider after you’ve tapped your friends and relatives. This approach requires very careful consideration since angels usually don’t write blank checks. A few terms that one should understand are:
Liquidity; The ease with which an angel can readily expect their investment capital returned
ROI; (Return On Investment), investors are interested in seeing their money grow (by a reasonable multiple) & with limited risk.
Exit Strategy; they will want to see progress and a way to exit the deal down the line with meaningful profits.
One should presume that angel investors will do a lot of research and careful investigation into your business plan. BCBIZDEV can help tailor your business plan to outline the specific requirements usually sought in this targeted approach.
Always try to be very thoughtful when approaching potential investors. Resource investors, for example, are usually not interested in hearing about a textile manufacturer. A haphazard approach is likely to turn them off. Industry associations, local trade groups or, in some areas, business-incubator centers can help point to potential angels. There are many “meet-ups” or local business networking groups all over that can be explored for invaluable personal testimonials about the success & potential pitfalls to avoid.
Angel investors often invest through groups or networks. These provide due diligence, extra research, access to potential deals and shared expertise that one person operating alone generally doesn’t have. For instance, one member of an angel group might have background in a particular industry or the know-how to set up deal terms, sharing that knowledge with the other […]