Angel Investors | Allies Of Free Enterprise
Go to http://adventurebusinesscapital.com to get great information on Venture Capital! We have the best tips and articles to provide business owners with add…
Video Rating: 0 / 5
No holds barred when investors must pitch to entrepreneurs
The ‘Damsels Den’ event is an afternoon of role reversal where “high net worth individuals” who invest in start-up companies, known as “angel” investors, ope…
Interview with US Angel Investor Dave Berkus
In June 2013 Dave Berkus, one of the most active and most successful angel investors in the world, visited New Zealand as part of The ICEHOUSE International …
Rajan Anadan (Google) : What would you like to say to aspiring Angel Investors?
Rajan Anandan, Managing Director – Google India and angel investor in more than 40 companies shares what aspiring Angel Investors need to know. For more such…
In this short video, you’ll learn the seven most common mistakes that entrepreneurs make when presenting their business plan to angel investors. If you avoid…
Money For Starting A Business: Angel Or Private Investors
Finding an angel investor is one way for financing a business. When an entrepreneur says, “I need to go out and get venture capital,” what does that really mean? In one sense, ‘venture capital’ could be defined as any type of financing for an early stage company. But entrepreneurs who believe that they need to go out and contact Venture Capital Firms for their capital needs, can be starting down a long and frustrating path. Many of these firms are not terribly interested in seed stage or pure start-up companies, preferring to jump on board when the company has achieved a certain number of milestones in product development and securing customers for the product. And no amount of persuasion by the entrepreneur can get the Venture Capital Firm’s partners to deviate from their investment focus.
So who does assist the usually cash strapped start-up entrepreneur?
Wealthy individuals, often termed angel investors, are by far the most important source of equity capital for early-stage companies. Typically, these individuals have been successful entrepreneurs themselves, and as such have a keen understanding of the trials and tribulations of building a company. In the ideal situation, an angel investor, or a group of angels, can provide much more than financing for an entrepreneur: the angels can often bring organizational, technical, marketing, and financial expertise. And of critical importance, the angels often have valuable contacts with potential customers, vendors, and even sources of capital for the next stage in the company’s development.
Angels vary widely in their investment experience and their approach to working with companies they invest in. Some invest only in companies related to there area of expertise; in other words, an angel who built and sold an enterprise software company would look for other enterprise software companies. In general, however, angels are willing to consider investments in a broad range of companies: high-tech, traditional or “old economy” companies, distribution, manufacturing, service.
From the entrepreneur’s standpoint, there are two major difficulties with obtaining angel financing: how to find the angels in their local community, and how to handle the negotiations. Finding them is difficult because, in the past angel, investing has been done on an extremely informal basis. The entrepreneur’s company was referred to the angel through a mutual friend or business acquaintance. And angels do not seek publicity for their investment activities, for fear they will be overwhelmed with entrepreneurs seeking capital. There are no reliable directories of individual angels as there are for venture capital firms. For the entrepreneur, this means that the best way to find angel investing is through diligent networking in their local business community, attending events and letting people know that the company is seeking financing. Contacting angel networks, and participating in angel online matching services, both described below, are additional ways to meet angel investors.
Finding an angel investor is one way for financing a business.
Dee Power is the author of several business books including “Attracting Capital from Angels,” “Inside Secrets to Venture Capital,” and “The Making of a Bestseller.” She is the co-author of Business Plan Basics, a system teaching How To Write a Business Plan Her business website, Capital-Connection, provides business expertsfor entrepreneurs.
Here's Why Angel Investors Say No To Entrepreneurs
Angels, or private investors, invest more money in more companies at an earlier stage than venture capitalists. They are the lifeblood for seed and start-up businesses. Why do they say no?
Angels Just Don’t Get It
Entrepreneurs who face rejection by angel investors often blame it on the angels: those investors cannot understand my wonderful technology, or the angels won’t bother to take the time to understand. Some of this is just a means to protect the entrepreneur’s tender ego, but it does point out how there can be critical gaps in communication: an entrepreneur thinks he’s doing a good job explaining the deal, but in fact he’s not getting through at all.
Angel Was The Wrong Audience
Angel investors invest smaller amounts of capital in earlier stage companies than venture capitalists do. They also take more of an interest in the day-to-day management of companies they invest in. Investors aren’t usually interested in investing in life style companies, ie., companies that provide a comfortable life style for the owner, but don’t have expansive growth opportunities. They want to see a company that can reach significant earnings in a short amount of time.
Lack of Preparation by Entrepreneur
Entrepreneurs are often guilty, in their eagerness to get started building their company, of seeking out angel investors before they are prepared to present their deal or carry on negotiations. Angel investors often have a great deal of business experience and can ask the kinds of probing, difficult questions that quickly puncture inflated projections or poorly thought out strategies.
ROI/Exit Strategy
Entrepreneurs emphasize bringing capital into the company; investors are quite reasonably interested in getting capital out of the company. Unless the entrepreneur can convince the investor that a lucrative exit is possible within a reasonable time frame, the deal is unlikely to get done.
Management Team
Angel investors invest in the management team of a company. Often there’s only the business plan, at best a prototype product, and no revenues. If the management team is weak or inexperienced, angels are reluctant to invest.
Deficiencies in the Presentation by Entrepreneurs
It is an unpleasant fact that entrepreneurs with good ideas can still miss out on obtaining funding because of poorly prepared business plans, executive summaries, and other presentation materials. A great business plan does not raise capital for a company (you need a great management team as well), but a poor plan sends a signal to investors that the founders may also be sloppy in the way they run the company.
The Concept or the Idea is Flawed
Some ideas have zero chance of getting funded, and that’s just the way it is.
Entrepreneur Was Not Able To “Sell” the Investment
Part of raising capital depends on simple sales skill, and if the founder of the company does not have that skill, he needs to develop it quickly or have someone with that skill assist him with the presentations to investors.
Subjective Factors
The decisions made by angel investors are not cut-and-dried based on analysis that leads to an easily obtained conclusion. Angels operate in an environment where the crystal ball can get extremely cloudy at times, and must rely on their instincts honed through many years of being on the firing line in their own companies.
How to Avoid Hearing ‘no’ from an Angel
1) Spend a lot of time discussing how the management team’s background will lead to growth and profitability for this venture
2) Do not skimp on the time and effort spent on developing and practicing the presentation to angels; Don’t ‘wing it’ with angels
3) Don’t assume everyone can pick up on technical jargon; keep the presentation in layman’s terms as much as possible
4) Test your business model out on experienced business people and obtain their feedback before seeking funding
5) Present alternative ways the investor can exit the deal, when and how.
Dee Power is the author of several nonfiction business books and a guide on how to write a business plan She writes on the topics of how to reduce credit card debt
Why Choosing Angel Investors Is The Best Choice For Entrepreneurs
Angel investment is a type of financial equity that is provided by Business Investors to budding businessmen in order to start a firm that operates on their dream idea. There are several people who have remarkable business ideas that are quite feasible if supplemented with appropriate funding and nurtured with the help of experienced industry personas. Erstwhile, the only options for the masses were taking loans from their families, friends, banks or moneylenders, as well as maxing out several credit cards. Then, venture capitalists arrived but they took up an active role in the management, which did not provide the entrepreneurs with the requisite freedom for Starting Small Business.
This led to the birth of Angel Investors, who were professionals with considerable wealth and extensive industry experience. As time passed, the investors combined to form angel networks, which pooled their resources and provided the requisite funds to individuals who had exceptional business ideas. They did not interfere with the working of the business, but offered valuable advice to the budding businessmen in order to allow them to grow on their own. As the networks comprised several people, the funds soon began to be distributed to individuals interested in establishing their business in diverse industries. For example, the same network can grant the financial help to a person who is Starting Small Business of manufacturing automobile components as well as to one looking to offer commercial cleaning services.
This type of investment option is gaining popularity all across the globe at a rapid pace among Angel Investors and budding businessmen, alike. The investors put amounts up to US$ 1 Million in the plans easily depending upon the soundness of the business plan and the expected rate of growth. Typically, an angel investment network looks to grant the capital, contacts and industry expertise to the entrepreneurs for a period of 3-5 years. After this period is over, the network looks to exit the business and take its share via mergers & acquisitions, strategic sales or IPOs. For an individual who is struggling to find the required amount of capital to start his business, such Business Investors are a godsend.
Usually, the angel networks grant these loans to individual who dream of Starting Small Business in the following fields:
Agriculture & food processing
Banking & financial services
Biotechnology, pharmaceutical & life sciences
Clean technology & water
Education
Healthcare
High-end BPO / KPO
Internet
IT products & services
Media, entertainment and mobile VAS
Retail
Telecom & embedded domains
Travel, tourism & hospitality
These are conventional lines of work that are considered safe by all business Investors, not just angel networks. But, upon the submission of the business plan, if the members find it to be feasible and fruitful, they also award the funds to entrepreneurs looking to make it big in peripheral industries.
Jacklin jonse has a 4 long years of career proficiency of working as a content writer. Throughout the years, Ms. Jacklin has been writing content about SEO Company India and business investors related issue and has offered some of the outstanding contents to our viewers. My favorite business investors site is: http://www.indianangelnetwork.com
Find More Angel Investors Articles
Budget 2012-13 Proposal to tax angel investors to burden young start-ups Watch Video.mp4
Video Rating: 0 / 5
Convincing Angel Investors Your Business is Worth the Risk
You have a great idea for a business but venture capital firms are unwilling to lend you startup funding for any of a number of reasons. Venture capitalists are more likely to fund large startups that may need as much as $ 5 million and up. It only seems appropriate that one of the alternative sources of funding is named the angel investor. An angel investor is a private investor who invests personal money in an entrepreneurial company.
Many Angel Forms
Angel investors come in many forms. An angel investor might be a professional like a doctor or an attorney. Some angel investors are retired people who have discretionary money. Much to people’s surprise, the typical angel investor is not a millionaire.
Many private investors are business associates. Business associates are any persons or businesses that might be willing to invest in your company because they are familiar with your business idea and find it to be workable. They may be people who will be working for you and want to invest in the company or potential suppliers who have a vested interest in you starting a business that will use their products.
There are even angel investors who are fellow entrepreneurs and simply want to help other entrepreneurs like themselves get started.
Angels are Everywhere
If you get the idea that angel investors are just about anywhere you look, you would be right. Many times the small business entrepreneur only thinks in terms of traditional funders and doesn’t consider the fact that plenty of people including business associates are willing to lend money. In fact micro-lending is actually a network of angel investors who want to help small entrepreneurs pursue their goals.
How do you find angel investors? The simplest way is to take advantage of services that cater to entrepreneurs seeking startup money.
Though you can search for funding through friends or business associates, the matchmaking service will bring together budding entrepreneurs and angel investors quickly and efficiently.
he angel investor actually functions in a manner similar to a venture capitalist. One of the main differences is that angel funders are as interested in things like leveraging their abilities and promoting entrepreneurship as they are in making a profit. Some angel investors will want to play an active role in your business while others will be silent investors. If an angel investor wants to participate, it gives you excellent access to knowledge and experience that can increase your chances for success.
Preparation is Important
When you decide that angel investing presents the best startup funding opportunity, it’s important to be well prepared. Your business idea must be well thought out and your business plan needs to be thorough. Don’t be deceived by the fact these investors are called “angels”. They are solid, experienced, knowledgeable investors who will ask tough questions and expect well prepared answers. You will need to be prepared to discuss your idea, marketing strategies, location, website development, customers, staff and expenses.
Get helpful info about startup business funding and angel investors at http://www.funded.com.
10 commandments: how to choose and work with great angels and investors
Public program for internet sites, CambridgeElevator.com recognized Specialised Entrepreneurs Many several weeks a opportunity to see business angel and entrepreneur, Sherry Coutu produce 10 recommendations on how to select and do with amazing angels and investors.
The products of wiseness were:
1 Choose angels/mentors who have an amazing program of relationships in your industry.
2 Select an individual rather than a ‘firm’. Personal track-record and value-add are significant.
3 Select an angel/investor after mentioning with their other investee organizations first (thefunded.com).
4 Select an angel customer who has gone down the route you need to go down (raising money/floating).
5 Select an angel customer instructor who has run a organization to seat your position.
7 Choose to pay attention to your client and make sure they adequate available for you.
8 Choose to convey with your investor(s). Awesome what you will see out!
9 Know that amazing angels and investors help you with three styles of things: features, customers and strategy.
10 Do not try to provide the process to someone else!
Emphasising the need for amazing backers, Coutu said LinkedIn had recognized that it wouldn’t be such a success without the amazing of the traders it had drawn.
Coutu also influenced the value of considering scale-up very much from the ‘off.’ If you think your start-up has the prospective to scale-up, then discover out out out out out out out a instructor with encounter of scaling-up organizations, she suggested – and don’t prevent yourself geographically: if you can’t look for the right instructor in the UK, look further afield.
Getting angels or VC backers with significantly locations was essential, she said.
Create sure that traders aren’t about to run out of cash because if they are never get follow-on designs you’re attached. The outside team will not see it as the investor’s mistake – they will think your enterprise enterprise is a dud.
Great traders would help online organizations appeal to functions, get clients and help with use of key connections and details, she emphasised.
But she influenced the need to “close the cope. Don’t depend on a handshake. A cope with an customer will need to be formalised.”
CambridgeElevator.com is a social network for startups connecting budding entrepreneurs with mentors, investors and advisers with the experience to help them grow. CambridgeElevator.com offers free membership registration.
Survey: 1 in 2 Angel Investors Regrets an Investment Made This Year.