An angel investor can be found easily these days. Thanks to the internet, the professional networks and the platforms of seeking to fund. However, before moving on to understand the perks or pros of angel investment, you need to remember that an angel investor will put in money only when they are offered an equity in the ownership or a convertible debt. Remembering this as a crux, there is a need to know how you can go about impressing an angel investor without much ado.
How Angel Investors Invest?
An angel investor can pump in money on an individual basis or as a part of a group of investors. They are seasoned investors or even maybe novice ones. In fact, there may be several angel investments in a start-up amounting from a small sum to a big figure. Therefore, you need to understand that angel investors will put in money only when they deem your start up as eligible and will also weigh the stage it is in.
The magic begins with your main pitch. As the CEO of a start-up, you will need to pitch your idea or product in a way that angel investors are convinced that there is something in the same for them. The luckiest of CEOs will gain a successful investment in a jiffy while some will need to schedule more meetings and present more analysis before an investor agrees to be part of the company.
To understand the funding scenario or structure of angel investors you first need to avoid taking things for granted. For example, two angel investors will surely think differently and no matter what, while one could go gaga over your concept, one might find it to be a total no better. The fact remains that angel investments can be procured with nothing but a real conviction that comes across as part of your business.
Angel Investors Versus Venture Capitalists
Angel investors are totally different from venture capitalists in that the latter are more expensive investors. This is not always a hard and fast rule but generally, venture capitalists can offer figures higher than say, a million dollars. There also exists another mid-segment group of investors known as super angel investors. Understand these basics to begin with understanding the complete system for angel investments. According to the Angel Capital Association, “Angels generally invest their own money in start-ups and very early stage companies, while VCs mostly provide capital they have raised from others to later-stage businesses for growth.”
Since angel investors are a steering force for your startup, make sure you do not falter in your concepts. Make sure you check out the credentials of an angel investor headlong before moving ahead and asking one for a pumped in fund. It is not easy getting a base funding for your startup but then it is no rocket science either. Planning and thorough execution are the keys here.