Saturday, August 21, 2010

A Wise Move for Business Is to Seek an Angel Investor

There are many people with good business ideas however they don't have enough capital to convert it to a real profit making venture. There are some people who seek the help of an Angel investor. They would invest in your business idea even if the money is tighter. They are giving away capital and helping start up businesses out there.

According to survey there are over hundred thousands of angel investors who are providing capital to businesses out there. Overall, these investors are giving away about $20 billion a year. If you are seeking to find an angel investor, there are some things that you should know.

One is to know the place where to look for angel investors. Most of them are looking at universities with business courses. This serves as an incubator for ideas. It is a good idea to contact local business groups. They would know some organizations that offer capital. Ask your friends or family in case they have an idea on this matter.

Asking around can lead you to the money you are seeking like high net individuals or big corporation that are interested in investing in small business. Some are willing to take the risk as long as the concept is strong enough and it is run by good people.

When seeking angel investors, you need to show them value. Your idea should be interesting. This would make them pay attention to your products and service. Make sure to have a business plan ready. It should be more than just an idea. You need to know how to attract customers or prove you can create product.

Very few investors would go for an idea without backing up. Business plan should cover the product, market and the execution. Explain the ways to make money. Add documents like profit and loss balance sheet. This is essential in their decision making if they would invest or not.

Remember that investors talk to other investors. Always be sure that your first business plan is very good. You don't want them to talk about a lousy and disorganized idea. There are angel investors who belong to association and they have venture capital firms.

People don't know that they pool their money so that it will be larger and they could spread the risk. Angel investors would also want to get involve in your business. They don't just give the capital.

There are many who want to become board of directors. This is something positive and you could use their advice. Your investor will not just sit back after giving you tons of money. It is a good idea to plan an exit strategy for the investor. Aside from the potential return of investment, you should know what to do in case things don't work out.

You need to communicate often with the investor. This is a business partnership so be transparent with your plans. This is a condition for most of them. Always keep these things in mind so they won't take their money and say goodbye.

By : Janaki_Patro

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