| If your business is too new, too risky
| |
| | else) to part with their cash to support
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| and unproven, or too offbeat to qualify
| |
| | your venture takes a lot of time and hard
|
| for traditional bank financing and
| |
| | work. Be sure to dedicate enough time and
|
| attract venture capitalists, you may want
| |
| | budget in your search for financing.
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| to look for an "angel." Although the
| |
| | Once you find a prospect, send a letter
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| figures vary widely, angel financing is
| |
| | requesting a short meeting to discuss the
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| believed to provide billions of dollars
| |
| | proposal. A more effective approach is to
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| in capital to entrepreneurs every year.
| |
| | be personally introduced to the angel
|
| If your company is too new, too risky and
| |
| | investor by a common friend. People are
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| unproven, or too offbeat to qualify for
| |
| | more inclined to be receptive to offers
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| traditional bank financing and attract
| |
| | from other people if the request come
|
| venture capitalists, you may want to look
| |
| | from people whom they trust.
|
| for an angel. An angel is a private
| |
| | In the event that the prospective angel
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| investor, often a successful
| |
| | shows interest in your business idea,
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| entrepreneur, who invests in small
| |
| | make sure that you have prepared a
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| businesses close to home for a variety of
| |
| | well-researched detailed business plan.
|
| economic and personal reasons. Usually,
| |
| | Your plan should emphasize why you need
|
| angels are friends, relatives, or
| |
| | additional financing and exactly what you
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| colleagues. Successful entrepreneurs,
| |
| | plan to do with the money. Write an
|
| especially retired ones, are especially
| |
| | executive summary for the plan that
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| likely to become angels.
| |
| | spells out in one page why someone should
|
| Although the figures vary widely, angels
| |
| | invest money in your business. Explain
|
| are believed to provide billions of
| |
| | too, how you can repay the money and
|
| dollars in capital to entrepreneurs every
| |
| | when. Better yet, have presentation
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| year. Based on demographics, studies
| |
| | materials ready based on your business
|
| characterize angels as follows: They are
| |
| | plan in order to have a more effective
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| wealthy They are usually self-made as
| |
| | discussion with your prospective
|
| opposed to inherited wealth Is usually in
| |
| | investor. You want to appear relaxed,
|
| their sixties; almost never below forty
| |
| | confident and knowledgeable as possible.
|
| Angels prefer to invest in companies they
| |
| | If the investor is interested, bring in
|
| are familiar with. They usually seek out
| |
| | your lawyer and accountant to the
|
| small and growing companies in their own
| |
| | negotiations. Informal investors usually
|
| industry.
| |
| | invest from $10,000 to $100,000 in each
|
| How do you find an angel for your
| |
| | venture. While angels may be able to
|
| business? Here are some tips: 1. The
| |
| | invest considerable money in your venture
|
| first place to look for is among your
| |
| | without requiring the kind of
|
| business associates. You have a greater
| |
| | documentation that other investors do,
|
| chance of securing financing from people
| |
| | put your arrangement in writing to reduce
|
| who knows you. Then ask your business
| |
| | misunderstandings.
|
| associates to ask their acquaintances.
| |
| | Angels may prefer to make straight loans
|
| However, the farther the relationship and
| |
| | at rates comparable to banks or slightly
|
| the lesser the prospective angel knows
| |
| | higher rate. They generally expect to
|
| you, the lesser the chances of securing
| |
| | lend their money from three to seven
|
| the investment unless they have a unique
| |
| | years, with some guaranteed exit
|
| understanding of your product.
| |
| | provisions such as mandatory buy-out.
|
| 2. Network, network and network. Join a
| |
| | Others may want to be repaid in stock if
|
| professional organization or trade group
| |
| | your company eventually goes public. Be
|
| for your industry. Begin attending
| |
| | sure to tailor the financial arrangements
|
| meetings on a regular basis. This is the
| |
| | to fit your angel's needs.
|
| best way to get acquainted with
| |
| | Angels can also provide you, not just
|
| successful business owners in your field.
| |
| | with money, but guidance, advice and a
|
| 3. Stay local. You don't need to go
| |
| | mentor relationship. Also called
|
| beyond your geographic area to find
| |
| | "advisory investors," they are generally
|
| investors willing to take their chances
| |
| | not interested in controlling the
|
| with your venture.
| |
| | business, but may require you to meet
|
| 4. Discreetly inquire about people who
| |
| | certain business goals or follow certain
|
| appear to be the most successful members
| |
| | business practices. If possible,
|
| of your industry. Pitch the idea to your
| |
| | encourage your angel to become a member
|
| lawyer or accountant - they may be
| |
| | of your informal advisory board. Many
|
| interested or know someone who could be
| |
| | angels like to keep a close eye on their
|
| interested. They may have clients who
| |
| | money; plus, they can offer you
|
| frequently invest in a new and growing
| |
| | invaluable advice. If your angel is well
|
| business.
| |
| | connected in the local business
|
| 4. Research on the Internet. Some sites
| |
| | community, he or she may help you find
|
| provide listings of angel investors per
| |
| | additional investors, introduce you to a
|
| geographical location, while others
| |
| | banker or an attorney, or bring in new
|
| provide focused advice on getting
| |
| | customers. An angel may also help you
|
| investors for your small business. Check
| |
| | gain membership in a club or professional
|
| out the following sites: vFinance
| |
| | society that will benefit your business.
|
| Directory of Angel Investors: http:/
| |
| | Remember that every relationship is
|
| www.vfinance.com International Angel
| |
| | different. The key to success is doing
|
| Investors Institute: http:/
| |
| | everything you can to increase your
|
| www.angelinvestors.org Venture Vortex:
| |
| | angel's comfort level so the person's
|
| http:// www.venturevortex.com However,
| |
| | investment and relationship with you and
|
| the rule is always to raise money at the
| |
| | your business will be longstanding and
|
| right time. Convincing angels (or anyone
| |
| | profitable.
|
