More and more startup entrepreneurs nowadays are looking for advice on how to attract angel investors to grow their business. An angel investor is always an attractive funding option for startup entrepreneurs. An entrepreneur needs to understand having an idea is not enough to attract angel investors.
Entrepreneurs need to understand what angel investors exactly look at startups. Angel investors are accredited investors, who invest their own money for a percentage of the business.
8 Tips to Attract Angel Investors for Startups
Here are the simple ways to attract angel investors to fund your business venture:
#1. Build a Convincing Business Model
Angel investors always look to see a well organized and thought out business model. They will be interested in your startup model is profitable, expandable, and revenue sharing. It is important to clearly define your competitive landscape of the business and how the product has a clear competitive advantage over other competitors.
#2. Build a Team
Building a pro-organization strong team is very important for entrepreneurs who are looking for angel investors. Angel Investors must feel confident about your management team as they are supposed to implement the company’s vision and goals.
They would prefer to invest in a startup that has an experienced team with credentials rather than only having a killer tech idea.
#3. Put Your Own Money
Before looking for an angel investor put your own money in the business. When you are expecting investors to risk their money in your venture, you should also put your money at least 20% on the net worth of the business.
#4. Create a Financial Projection
Angel investors always like to see great opportunities with double-digit growth. To comply with your startup as fundable, you will need to have a fifth-year revenue projection with Rupees 20-100 million growth. Always remember small numbers may make be a good proposition for your business but won’t attract angel investors.
#5. Do Online Brand and Media Promotion
Concentrate on the basics of search engine optimization, social media engagement, video marketing, and courting influential bloggers. Successful online branding is what your consumers will remember you even when you are not available.
#6. Generate Loyal Customers
When you are looking for angel investors, you need to consider the adaptability and acceptability of the product in the market. Consider the customer feedback about the product and what problem gets solved by your products or services.
#7. Be Straight Forward
You need to understand both what angels are excited by and what they’re scared of. Most investors see themselves as “value-added investors,” meaning that they derive as much personal satisfaction from helping a new business owner as they do from contributing capital to the venture. They always prefer a transparent and well-planned entrepreneur who can answer the questions about risks upfront.
#8. Be Persistent And Patient
Entrepreneurs must be committed, passionate, and thick-skinned. Raising capital is a time-consuming, ego-challenging process. Remember Persistence and passion are seen as virtues by angels, so rejection should only be perceived as a temporary setback.
Attracting angel investors is not a simple task. You should be fully prepared with self-evaluation facts before going to pitch for investment. It is recommended to find someone who can help you to overcome the task and fill the gap.
Editorial Staff at NextWhatBusiness is a team of Business Consultants having years of experience in small and medium scale businesses.