Finding an angel investor is an incredible opportunity to move from idea to product and make your dreams of business come true. The trick is knowing how to get an angel investor in the first place, which is where a lot of people run into trouble. There are a few points to know to make your search easier and to give you options in which angel investor to align with. After all, you should never jump at a single opportunity without weighing your options or having a few first.
Before we get into how to get angel investors, let’s discuss what they are.
What is an Angel Investor?
Essentially, angel investors are wealthy private investors who focus on financing small business ventures in exchange for equity. They use their own net worth rather than an investment fund and are a large group of potential financiers that are worth looking into. They tend to be more patient with newer business people and are more comfortable giving smaller amounts for a longer period of time instead of a large lump sum. Angel investors are a great choice for those starting out small and don’t need a lot of cash to get started.
What to Look for in an Angel Investor
Not all angel investors are created equal, and it’s important you know what kind is the best fit for you. Though there are several factors you want in any angel investor you’re interested in having finance your venture:
- They have previous and successful entrepreneurial experience
- Has a net worth above one-million
- Has an income that is above $100,000 annually
- Enjoys being involved in some capacity, whether as a mentor or in the operations
- Has knowledge of the industry they like to invest in
- Will refer people to other angel investors if they aren’t interested
These are traits you’ll want to see in any angel investor that catches your eye, and while some of the money-based points are flexible, you want to make sure you are financed by someone who knows your industry.
Referrals are Key
Angel investors can seem like they’re a mysterious element in the investment world, but that’s because many of them don’t advertise as such. Instead, many operate via referrals only so that they don’t get inundated with flimsy proposals and shoddy plans. Networking is paramount when looking for how to get angel investors, as many of them talk with each other about exciting ventures they’re involved in or the industry they like to finance. To find an angel investor that matches well with you, you need to get to know the right people by immersing yourself in the community you want to do business in. You want to focus on business owners, as many angel investors own and operate their own companies, as well.
It’s also important to note that many angel investors work as a kind of informal network, that way they can pool their resources and share the risk of investing in start-ups. Knowing this means you have the potential to meet several angel investors at once instead of hopping from one to another in order to secure financing.
Where to Network & Be Prepared
Beyond attending trade and similar events, there are a host of websites and online communities dedicated to matching entrepreneurs with angel investors. This isn’t only an opportunity to meet with potential financiers, you can also test run your business proposal to a wider group of people. Considering that you can never do enough homework when it comes to building a business, a test run and gaining feedback is a valuable resource to have.
That is part of our m.o. here at Seedology, to give feedback and advice, to help entrepreneurs and start-ups build their companies. Seedology is a software development company meets venture capital firm, and we have extensive experience turning exciting ideas into a profitable business by empowering you with the kind of support you need to thrive. Our guidance is designed to help an early-stage tech company launch its first product and take it to market, as well as be an angel investor in the industry we love being part of.
Remember these tips for how to get angel investors, whether that be by presenting to us or securing your own. Good luck on your hunt and we’re here if you need us!
