At the initial stage, it's quite tough to get a loan from the bank. Therefore, at this point, your best option could be - angel investors.
Who are Angel Investors?
Also known as a business angel, informal investor, angel funder, private investor or seed investor, they provide capital to start-ups in exchange for ownership equity. Angel investors vary widely, but they are typically willing to accept the risk.
Here are seven tips to get your angel investors on board:
- Make a plan: It is essential that you must have a good and innovative idea. If you are just starting, then make sure you have done enough research and development, explored your target audiences and markets so that you can easily forecastthe future of your start-up. These all will give you brownie points in front of the angel investors. You need to be unique in your approach as there might be a similar product as yours in the market. The investor would only invest if your approach is promising.
- Tell them about your successful past business ventures: You have to keep a record of being successful with your previous ventures. This will give you a chance to prove yourself and get angel investors on board. Investors only care about making a profit and doubling their money. If youve been in business a while and have done relatively well then this is the best time to approach an angel investor.
- Know your numbers: You must be aware of your profit margins, expenses, balance sheets and sales target. Don't be blank when your investors ask you such questions. Carelessness might ruin your business finances. Review these before meeting the investors. After knowing the numbers you can confidently answer the investors.
- Go for the investors who are in the same industry: You won't ask a dentist to give a treatment to your dog. Right? In the same way don't approach those angel investors, who are not in your industry. They are experienced individual in a particular industry. So, as a budding entrepreneur, you should go for the investors, who had worked in your industry. As they will have a fair idea about it and they might give you contactswhich will help your business to grow.
- Invest your own money in your start-up: Many investors might not invest money in your start-up if you are not investing your own. Think about it, if you are not ready to take risk why will the investors do so. By putting your own money in your start-up shows how serious and dedicated you are towards your business. So, keep this in mind. You might think it as an unnecessary point but trust me it's important.
- Grow your network: Investors want to see how much hard work you are doing to promote your business and to increase sales. You need to grow your network for that and it is your job to make a presence in the existing industry. If you show the investors that you are doing your job properly then they will do theirs. Keep promoting your brand to get more angel investors on board and this will help you in growing your connections as well. Be active on social media.
- Last but the most important is stay confident:
Everything will be incomplete, without your confidence. Make it a point to show them how passionate you are about your work, how will you execute it and how you and the angel investor will gain profit. Show your sincerity, be diligentand trust me the investors will be tempted to work with your start-up.