Angel investments can be your best bet if you’re looking for funding for your startup business.
It’s a great deal for both the founders and investors. Private investors provide capital in exchange for equity ownership or convertible debt.
A lot of big companies owed their success to angel investors.
Naval Ravikant, a top angel investor has contributed to companies like Twitter and Uber. Ron Conway, a renowned investor from Silicon Valley also made Google and Paypal possible. Facebook’s global success will not be possible without its first angel investor Peter Thiel.
What are the benefits of angel investment for startups?
They can provide capital fast.
Most startups usually only need a small amount to start. Angel investors have access to funds of up to $500,000 or more, which founders use to get them a head start.
They provide guidance.
Most angel investors are former entrepreneurs. These individuals share their skills and experiences, which is much more valuable for beginners. They understand the challenges of building a company and what it takes to succeed.
Most are risk-takers.
Angel investors are often optimistic in their startup investment. Most of them are already established entrepreneurs. They are more confident and at ease in taking risks.
They offer flexible deals
Since they are investing their own money, the deals are usually negotiable.
Most angel investors don’t ask for monthly payments or interests that traditional lenders demand. Angel investors can also propose different methods for returns instead of cash. It all depends on the deal you work with them.
How do angel investors benefit in investing in a startup?
Supporting entrepreneurs can bring significant financial returns.
One possible deal is getting a chunk of the ownership of the company. It also requires less work compared to running their own business. Super Angel David Rose said that private investing is “entrepreneurship without the responsibility”. They reap the benefits without getting their hands dirty.
What do angel investors usually look for?
Some angel investors like to invest in business ideas that capture their interests. Some of them are more concerned with the business’ potential to grow. Every investor is searching for a different type of business to invest in. But a majority of them look for entrepreneurs with integrity and good business plan.
Where can I find angel investors?
- Online forums. Online discussion forums like Investors Hub, Silicon Investor and Investors Village. Register and check the threads by investors looking for businesses to support.
- Social Media. You can locate angel investors in some social media sites like LinkedIn and Facebook. Use the search feature and you might find the right investor.
- Angel Groups. Some of them form groups that combine their funds and experiences. This enables them to support more businesses and get bigger returns. Here are some of the groups and their websites that you can check.
- AngelList- It is the perfect site for entrepreneurs who want to try angel investment. Co-founded by Naval Ravikant himself, you can get in touch with vestors and mentors to help you succeed in your venture.
- Asia Fintech Angels- AFTA dedicates itself to Fintech and Financial Innovation. The first in Asia, this network has a track record of providing funding and mentoring to early phase businesses.
- Gust- Gust claims that over $1 Billion invested in startups through their group. You can build a profile on their website and share it with investors to get angel funding.
- Angels Den- Angels Den’s goal is to fund exciting businesses that will still be here in 10 years’ time. 90% of their funded deals since 2007 are still in business.
- Local Business and Networking Events. You can meet and connect with investors and fellow entrepreneurs in such events. You can use sites like Eventful and Meetup to find events near your area. All you have to do is type “entrepreneur” in the search field and find a group.
Angel investment can be the key to your startup business’ success. The key is to come up with a great idea, a strong business plan, and the right network to make it all happen.
Have you tried angel investment or angel funded a business? Tell us about your experience below.