Small businesses often turn to “angel investors” when they need financial assistance. Also known as informal investor or just “angel”, they are affluent individuals who don’t just write blank checks. They’re a bunch of thoughtful, meticulous and smart businesswomen or businessmen willing to help promising business projects and startups.
So how do you convince a potential angel investor to help launch your new project? Here are six practical ideas to keep in mind to help you successfully score angel funding:
1. Be organized
Sufficient preparation is the key. Angels like to see a well thought out plan with a prepared and competent person or a team behind it. Do your homework, be passionate about what you do and be sure to build a highly convincing case prior to pitching your ideas to an angel.
2. Connect personally
Seek out angels who specialize in your chosen industry and establish a connection with them personally. Angels do like to spend their time with entrepreneurs especially at the beginning of a project, so getting along with your angel is very important.
3. Make strategic connections
Book yourself solid to attend business networking events. Angel investors tend to give more consideration those plans that are referred to them by a trusted source. With that, having strategic connections with business people in your industry is crucial.
4. Put in due diligence
Finalize your business plan, financial model and exit strategy. You should also put in some work with choosing your angel. Determine what value she can bring to the table, not just money but also the intangibles necessary to make things work.
Know her expectations for return on investment (ROI) and your exit strategy.
5. Execute seamlessly
Organize a capable team to execute your plan. Angel investors want to see a solid team in place who can execute the plan seamlessly, and drive the business forward.
6. Keep them informed
Show an attitude of full disclosure. Your angels want to know what’s going on, how the company is doing at various stages. Provide them with details of short-term goals being accomplished and new challenges you’re facing. Keeping the line of communication open will keep your angel investor happy.
Convincing angel investors to fund your project isn’t easy. It requires plenty of work and a little bit of luck. But it can be done if you have a business idea that you totally believe in and the right approach to make it happen.
Do you have a secret sauce to wooing angel investors? We’d love to hear it in the comments section.
Also if you’re looking to connect to industry leaders, potential angel investors and women entrepreneurs, we invite you to register for the Annual MACs Women's Entrepreneur Summit this October 3, 2015. See you there!