How To Raise Money From Angel Investors

angel investors

Continuation from yesterday…..(What About Crowd Funding)

Angel Investors:

If you are unable to raise capital from previous formats, angel investors should become your best friends. Yet, it comes with a disadvantage. As we move down this capital raising list, the complexity levels and costs associated with raising capital increase substantially. For instance, while in the majority of cases you would be able to have a brief conversation with your friends and family in order to raise capital (at reasonable costs), such an approach would not work with angel investors or venture capitalists.

Before we get any further, let’s define who angel investors are, how to find them and what they are looking for.

Who Are Angel Investors?

They are defined as affluent individuals who provide capital for business start ups, usually in exchange for convertible debt or ownership equity. They can be anyone, but in the majority of cases they are high net worth individuals who have $1 Million or more in liquid investable assets. Some of these individuals advertise themselves as Angel Investors while others do not. Technically speaking, if you have a rich uncle with over $1 million in investable assets, he could be classified as an angel investor.

Where Do You Find Them?

There are four primary ways.

Look for angel investor groups in your city. Angel investor groups or organizations should be popular hangouts for angel investors in your city. They tend to pull their resources together in order to look for startup companies that match their requirements. They often have meetings and set up presentations/pitches for entrepreneurs and startups alike. And while some of them make capital allocation decisions based on group vote, others do so on the individual basis. Either way, there should be at least a few organizations in your city and you are highly encouraged you to look them up. Simply Google “angle investors in your city” to get started.
Search Online: There are a number of websites out there that cater to bringing angel investors and entrepreneurs together. com and angel.co are good places to start, but there are many others. These sites do their best to connect companies to capital, but it is not as easy as it sounds. A substantial amount of work on your part is still required.
Get A High Net Worth Individual List: There are many such lists out there, but I highly recommend going to Infousa.com and using their filters to get the best possible data. Do a search for people in your area with a net worth of over $1 Million and then contact them on individual basis to see if they would be interested in investing in your venture. Make sure you are following all of the rules and regulations associated with contacting potential investors.
Ask Around: Ask people within your circle of influence if someone A. Participates in angel investing directly and/or B. Knows someone who does. Ask for an introduction or a connection.

What Are Angel Investors Looking For?

While this might not be the case for all angel investors, many of them are interested in two things. First, they would like to generate massive ROI while participating in exciting start ups. Yet, for many it is much more than that. Many angel investors are also interested in participating and mentoring entrepreneurs. Trying to re-live their glory days through the companies they are investing in. Whatever the case might be, most angel investors approach this in a very serious fashion. Meaning, do not approach angle investors unless and until you are ready.

To Be Continued Tomorrow…...(Why Am I Seeing This On A Financial Website?)