Your business all begins with an idea. That idea could be anything, as long as it is something you are passionate about because, without passion, you won’t enjoy building your business. However, that idea also needs to be something that will be scalable and that people will want. Otherwise, no matter how much you love your products or services, you won’t be able to make any money.
Once that idea becomes a reality, and you have plans in place to launch and make it grow, you may want to recruit an angel investor. An angel investor is an individual or company that invests money into your business in return for a percentage of the equity. Over time, they will receive their money back with interest (how much depends on the size of their stake). We’ve put together some great tips to help you find an angel investor who will give you exactly what you need and want.
Break It Down
Of course, you know your business inside and out, and the story behind it as well as how it is faring now might all make sense to you in your head, but to someone who has never met you before, and who may know nothing of your business, it could all be rather a jumbled confusion of words if you don’t take the time to break everything down and work out what you are going to say and how you are going to say it.
Take your entire story – how your business came to be, how you set it up, what you are doing now, and where you want to take your business in the future – and break it down into smaller blocks of information. This way, you can ensure that you tell your story in order and don’t miss any vital information. You can also choose which parts of the story to disregard once you determine whether they are of use to you when talking to an angel investor or not.
Practice Your Pitch
Once you know which elements of your business you are going to talk about in your pitch, and which order you are going to go through everything in, it is a good idea to practice your pitch in front of friends and family, or a business & management consultant who is helping you to set up your business and keep it running. Whomever you give your practice pitch to, they will need to be willing to give candid feedback, so let them know this from the start; the last thing you want is for someone to listen to you and tell you it’s all perfect, only to find that there are problems that an investor will pick up on.
Once you have the feedback, you can then hone your pitch to be perfect, practicing as many times as necessary to get it right. Remember, this is the start of the next stage of your business growth, and therefore speaking to this angel investor is massively important. This is why you need to practice as much as possible beforehand – you can quash your nerves and be sure of everything you want to say, helping you appear more confident and sure of your business. This, as well as the information you give out, will help to persuade an investor to part with their money.
Don’t Focus On Just One Angel
You need to do your research before you start setting up meetings with investors. You need to know who is going to bring the most value to your business, as well as who is going to be interested in your particular products or services (many investors will only put their money into a business that interests them, even if they aren’t going to be directly involved in running it).
There will probably be one stand-out investor whom you definitely want to invest in your business, and it is to them that you should go first. However, you should also have other meetings set up with different investors, just in case your first choice is unable or unwilling to help you. It may even be that, once you meet with more than one investor, you find that one of the others is actually more suited to your business and who can help you more than any of the others, even the one you had determined would be the ultimate investor.
Remember to ask questions as well as answer them. You need to be sure that the investor you are speaking to is really going to be able to add value to your business. Many angel investors give more than ‘just’ financing – they give advice and can be excellent mentors in business too.
M.E.L. is an attorney and small business entrepreneur whose mission is to help professionals conquer the workaday world with style and poise.
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