9 Steps To Finding Angel Investors For Your Business
Angel investors are wealthy, experienced businesspeople who invest their time and money in your high-growth business in exchange for equity.
“There are anywhere from 20,000 to 50,000 angel investors in Canada,” says Yuri Navarro, Executive Director of the National Angel Capital Organization (NACO). “Beside the visible community, there are many who invest, but who don’t advertise it.”
Angels are often the first ones to invest in early-stage businesses and that carries a lot of weight in the eyes of future investors.
“It’s a vote of confidence that can help attract venture capital funding,” says Dominique Bélanger, Vice President, Strategic Investments and Partnerships at BDC Capital.
Navarro and Bélanger offered tips to keep in mind to increase your chances of finding angel investors. Even more, they gave tips to persuade them to fund your company.
1. Make sure your company fits the profile
“Only about 5% of companies that seek angel investments are successful,” says Navarro. Navarro’s organization counts more than 2,000 angel investors as members. “That shows you how competitive it is out there.”
Start-up financing is high risk, so angel investors need to generate sufficient return from their winning investments to offset the losers. Certainly, that’s why angels are typically looking to multiply their investment by 5 to 10 times. Your company has to have that kind of growth potential to attract their interest.
2. Get your business ready
It’s rare for an investor to consider an opportunity from the same entrepreneur more than once. Therefore, you need to be ready the first time.
Angels typically invest in companies that not only have great ideas, but a great team, and a track record for executing on ideas.
“Revenue is incredibly important,” Navarro says. “Investors are looking for commercialization stage opportunities, not concept stage opportunities.” Continue reading here.
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