Angel Investors
Angel investors: like dollars from heaven
Most people have heard the term Angel Investor, but many don’t know what the term really means, and fewer still know how to find one.
Angel investors are wealthy individuals who actively invest in (typically) very early stage companies. They often have had success building their own business and are looking for a way to parlay their windfall and experience into further success by building up a portfolio of fledgling companies. These investors often know each other and generally will band together to create an investment group. This allows them to spread the work of evaluating opportunities while ensuring that they can get in on good deals they might have otherwise missed. It is through these groups that an entrepreneur will find the most angel investors.
There are a number of things that the savvy entrepreneur should know about approaching an angel investor:
- First, while an angel investor will always be motivated by making money, it is rarely his primary motivation. Often, angel investors are compelled by helping companies similar to those they, themselves, built.
- While you want to pitch your startup to as many angels as possible, you should be aware that the vast majority only invest in their own back yard. Spend the lion’s share of your time on local angels because they’re the ones that are most likely to invest.
- Don’t expect the process to go fast. Angels are not in a hurry to put their capital at risk. They want to build a close relationship with you and make sure their money will be in good hands before they pull the trigger.
- Unless you are an experienced, successful entrepreneur, don’t overlook the opportunity to glean insights from your angel. He is a resource beyond a dollar figure. He has experience, connections, and market insights that can really help you. Use it.
