If your startup is looking for an Angel investor, does it make sense to present your plan to flocks of Angels, and assume that at least one will swoop down and scoop you up? In reality, hitting large numbers of Angels in multiple locations with a generic pitch is one of the least productive approaches.
Here are five key things you need to know to quickly find the right Angel for your startup:
1. Angels invest in people, more often than they invest in ideas. That means they need to know you, or someone they trust who does know you (warm introduction). For maximum credibility, start networking for potential investors to build relationships a few months before you start asking for money.
They also favor entrepreneurs who are experienced in starting a company, and experienced in the business domain of the startup. Your business model may be very attractive, but if you are new to this game, you may not be fundable. In this case you need a partner who has deep domain knowledge and a track record of building businesses.
2. A complete business plan is always required. Maybe friends and family will give you money with no plan, but Angel investors expect a real plan. All professional investors know that entrepreneurs who start a business without a written plan almost always fail.
Don’t forget to clearly outline the problem you are solving, before you give the details of your solution. Clearly spell out your business model and your exit strategy, so investors will know how you will make money, and how and when they will get their return.
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Via Marc Kneepkens