HOW TO ATTRACT ANGEL INVESTment FINANCING
The first thing you need to do is have a good business plan outlining everything there is to know about your startup business.
A carefully researched and drafted business plan will put you in a good position when it comes to attracting the interest of an angel investor to your business.
Most angel investors have questions about the business and you need to have the right answers if you plan on getting funded.
When drafting your business plan, some of the questions you need to address in it may include;
- What is the problem?
- What problem is your startup business solving and how does it plan to do that?
- Is there money in the problem?
- Why are you the best person or business to solve the problem?
- What is your business credibility?
How credible and trustworthy is your business in solving the problem with regards to competitors if any.
- So what?
If your business plan provides the best answers to such questions, rest assured whoever is reading it may just be interested in giving you the much needed funding for your startup business.
Most startups have business plans that seem good on paper but lack market implementation strategies or practicality.
- How good is your business plan?
Sometimes it is best to have a professional draft your business plan before you submit it to any potential angel investor.
The most important way you can get angel investment is to have and submit a proper business plan to an investor.
The business plan needs to outline everything there is to know about your startup business, funding needs, and whether you are prepared to give equity or convertible debt in return for getting funded.
HOW TO BECOME AN ANGEL INVESTOR
Most angel investors are accredited investors with an annual income exceeding USD $200,000 or more, and disposable assets exceeding USD $1 million in value.
This is not a prerequisite for classification as an angel investor. An angel investor provides more favorable investment funding terms when compared to other investors or lenders.
They invest in the entrepreneur rather than the viability of the business itself. The main aim of an angel investor is on helping early stage startups begin their business.
An angel investor may just be what your startup business needs to get the funds for starting and running the business.
Getting angel investments is not easy and requires that you dedicate time and resources, to attract the right angel investor for your new business.
TYPES OF ANGEL INVESTORS
- High net-worth individuals
- Friends and family
This may also be regarded as a type of angel investment, since there is no obligation for return of the funding provided.
- Angel investment platforms
HOW TO APPLY FOR ANGEL INVESTOR FUNDING
Business plan; Prepare and submit your business plan, executive summary or proposal to your contacts of angel investors.
Be patient; Wait for response from the angel investors to see if they are interested in your proposal.
More information; If the investor is interested and requests for more information, give them and provide satisfactory answers to questions they may ask.
Get financing; If all turns out well, you will need to sign an agreement between you and the angel investor, and get the funding your startup business needs.
Angel investor financing is good for entrepreneurs and startup businesses that are having financial difficulties during the startup phase of the business.
It is also good for businesses that do not have enough cash flow or collateral with which to secure loans from lenders.
It is important for a startup business owner to consider getting funding from an angel investor.
The business owner needs to have clarity with regards to what the angel investor will bring to the deal besides funds including expertise.
You need to also agree on the business management and development structures to iron out any conflicting ideologies.
Have a comprehensive business plan to help your startup business attract funding from angel investors.
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