The relationship between company and investor is usually close. When seeking a private investor, the entrepreneur should seek an investment partner with whom he or she can comfortably work and communicate. Mere financing alone, without a significant level of compatibility, will increase the likelihood of future disruptions to the business.
Finding An Angel
The entrepreneur should always begin the search for an angel investor locally. Angels tend to invest in start-up businesses that are within close proximity to them. Geographic proximity will also facilitate meetings, which tends to make for a more constructive start-up process.
Chambers of commerce and local business organizations are good places to make contacts that can lead to an angel connection. The entrepreneur should also speak with friends and business associates who may be in a position to provide information or references to angel investors. Referrals from successful people in an entrepreneur’s given industry can also be conduits to potential investors.
Local capital brokers and business advisors are frequently familiar with the identities of angel investors and can provide leads. Internet searches can also provide leads to angels, but the entrepreneur should limit the search to his own geographic area. Networking firms found on the internet generally provide angel contact details for a subscription fee and will also include the entrepreneur’s contact information in their data base.
Approaching An Angel
The angel’s first impression of the entrepreneur is critical. Angels tend to appreciate brevity, particularly during initial introductions. The entrepreneur should be able to summarize the investment opportunity succinctly. If the angel is interested in the business idea as presented, the entrepreneur can expand the explanation and provide supplemental detail.
The entrepreneur should prepare a pitch that can be delivered in different circumstances: during a phone call, over a casual lunch, or standing in a conference room in front of a group. The pitch should focus on how the start-up intends to meet a demonstrated need in the market.
The entrepreneur should be equipped to adapt to the angel’s personality and needs in order to create a comfort level for open discussion. It is also vital to be able to articulate workable solutions to potential problems that a start-up company may face by reviewing those issues prior to the first meeting with a new angel. This will ensure a level of preparedness to address problematic issues that might arise in the future.