5 tips to get angel investors on boardMunira Rangwala
Are you looking to start a new business or grow your current one? As a small business owner, chances are you won't be eligible for traditional bank financing. Where then can you get the necessary capital to fund your business? Your best option is to look at angel investors to give your business the financial aid it needs. Most entrepreneurs are skeptical about working with angel investors. Some others are clueless about how to find angel investors or how to approach them. Here are five different approaches to reach angel investors.
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Prove that you've been successful in the past
For this approach to work, you need to have a track record of being successful with your previous business ventures. If you're struggling to keep your business afloat, you'd be better off without the added stress of convincing angel investors to come on board. Investors are concerned about making profits. They want to see you double their money. They aren't looking to bail you out when times are tough. But if your business is doing really well, you're in a good position to ask for money.
Be aware of your numbers
Before you pitch your business to an angel investor, spend some time reviewing your numbers. Some of these numbers include knowledge about your profit margins, gross profit, sales over the past year, expenses, income statement, and balance sheet. When you've spent considerable time reviewing these documents, you won't trip over the answers during the pitch and you'll be able to confidently give a response that will in turn inspire confidence in your investors.
Do plenty of research and development
You believe that your electronic backscratcher is going to take the world by storm, but rest assured, an investor who has years of experience in launching new products won't see things the same way. If you're just starting out, you need to do plenty of research and development, explore your target market, and know enough to smartly forecast the success of your future venture. Only when you have a solid plan in place will an investor show interest in your business.
Only pitch to investors in your industry
If you wouldn't ask your child's pediatrician to extract your tooth, why would you ask an angel investor who has nothing to do with your industry to invest in your business? Angel investors are known to have deep experience in a particular industry. As a business owner, you should look for investors who understand your business idea and who have contacts in the industry to help your business grow.
Show investors that you've got it in you
The investment you seek shouldn't be your lifeline to success. You should prove to your investors that you are doing everything in your power to grow your network, promote your business, and increase sales. If you show your investors that you're doing your job, they will be keen on doing theirs. Entice an angel investor with your past wins so that he wants to be a part of your momentum.
Use the above-mentioned unusual approaches to get an angel investor on board. It might seem like a difficult task to convince someone to invest in your business, but if you go about it the right way, you'll surely achieve success.