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How To Find An Angel Investor

Written by: Evan Carmichael

Article Overview: Angel Investors - Who are they? What do they look for? What can you do? Where can you find them? Why do they say no and how can you get to yes?

How To Find An Angel Investor

Angel Investors - Who Are They?
- Bridge the love money / venture capital funding gap.
- Can provide both money and management expertise.
- Invest in 60% of startup companies.
- Invest 5 times more money than venture capitalists.
- Are successful entrepreneurs and professionals.
- Have an average annual income of $100-250k.
- Work through informal networks of business associates and professionals (lawyers, accountants, brokers)
- Are known for being private, independent and even reclusive.

Angel Investors - What They Look For
- They have related experience and industry contacts.
- You have a good story, honesty, and a passion for the business.
- They want to live vicariously through you / relive past glory.
- They like you and want to help.
- You are a close distance from them (in the same city).
- You have a solid business plan.

Angel Investors - What To Do
- Lose your ego.
- Ask for help, not money.
- Get them involved, show them, let them get hands on instead of just reading a business plan.
- Listen, don’t sermon.
- Respect their money.
- Respect their time.

Angel Investors - Where To Find Angels
- Informal networks (Accountants, lawyers, business associates etc.)
- 6 degrees of separation
- $100-250k income individuals
- Retired professionals / entrepreneurs
- Angel groups

Angel Investors - Why Angels Say No
- Angel and entrepreneur have different values, no trust
- Entrepreneur shows resistance to due diligence and defensive responses
- Entrepreneur has a passion for technology over flexibility
- Entrepreneur has poor knowledge of market, competitors
- Angel does not have ability to work with team
- Entrepreneur has "shopped the deal" and seen too many potential investors

Angel Investors - Investment Amounts
- Averages between $50,000 and $250,000.
- Below $50,000 is usually "love money" - friends and family.
- Above $250,000 is usually groups of angel investors or venture capitalists.
- They typically see themselves as a stepping stone to further financing.
- Their due diligence is usually between 6 and 8 weeks.
- Angels see an average of 8 to 10 potential investments per year.
- They will make between 2 and 3 investments per year.
- The Rule of 10 is that for every 10 investments an angel makes, 2 or 3 will be successful, 3 or 4 will fail, and the rest will struggle along.

Related Articles
  Who Are Angel Investors
  Starting Your Company With Angels...Can I Trust Them?
  Attracting Angel Investors
  FIVE GREAT LESSONS FOR ENTREPRENEURS for Standout Pitches TO ACCESS ANGEL INVESTORS
  Funding Your Start Up

Article Tags: angel investor, angel investors



Related Forum Posts
toronto angel group - The Toronto Angel Group is a very hard group to get into. You have to have a very stable and viable business plan and they like to stick their fingers into your pie and they are usually looking to invest big bucks. Which means that they usually want to take control. If you look deeply into these groups you need to know someone or have a very good idea with potential clients backing you up. In my opinion, other sources of financing will give you better control of your business or learning to ask for the money upfront. One of the things I found is that new buisness owners are afraid to ask for the money upfront but every other business expects you to unless you have a proven credit history. Good luck with the Angel Investors
SEEKING PRIVATE OR ANGEL INVESTOR - We are the inventors of a very affordable, easy to install, dual headed shower product named Superb Shower, that we envision will replace the traditional shower, and become the shower of the 21st century. Superb Shower showers a bather from the front and back simultaneously, creating a warm, soothing feeling all over the body. Superb Shower eliminated the need to turn several times during the course of a shower to stay warm and get rinsed off. In addition to transforming an ordinary shower into a luxurious showering experience for one, it offers great versatility. It is a therapeutic shower for those with sore muscles, and a very safe shower for the elderly. Superb Shower is also a convenient, time saving shower for two children or two adults. It is also extremely advantageous for the handicapped, who can now sit in their shower chair and hold a hand-held-shower-head for the front part of their body as they are being showered from behind. To achieve this versatility without our product would necessitate thousands of dollars in renovation costs and be extremely disruptive to the entire household. We received our first patent (5,564,139) on October 15, 1996 for our dual headed shower product originally named Super Shower, Reg. & TM # 1,776,397 on June 15, 1993. The plastic was extruded to our specification, and all units were hand assembled in three sizes (and custom when necessary), and came in two colors, white and almond. We came up with the idea of making our product in kit form. Our new and improved shower product is now patent-pending. We have a great working prototype and we are ready to have our product injection molded. We also have our own design for shower heads. Superb Shower will retail for between $100 to $140, depending on the finish. We have a very strong desire to have our product manufactured in the U.S.A., and we want to be able to employ the handicapped and senior citizens. We hold the belief that innovation is not just to be different, but innovation is also to render improvement. Our new dual headed shower product is a tremendous improvement over the single shower head and all other shower heads of today that only shower a bather on one side of the body. Our research into current market trends reveals that consumers today demand a lot from their shower besides just getting clean, and they are always looking for ways to enhance their shower. Our product meets these needs and desires, and there is no other product like ours currently being sold. During the past several years, we have put over $125,000 of our own money to fund the development and sales of our product. Here is where we need help. We are unable to move our business forward at this point because of lack of funds. We are seeking a Grant, Private Investor, Angel Investor or Venture Capital who would be interested in investing $425,000.00 You can contact us at ems50@comcast.net
Angel Investors - From Wikipedia, the free encyclopedia the definition is: An angel investor or angel (known as a business angel in Europe), is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors are organizing themselves into angel networks or angel groups to share research and pool their investment capital. With that being said, Angel investors can come from a number of resources. You can try ACA (Angel Capital Association) in US / CA. Family & friends- Well, for me personally, I never do that type of business with family or friends for fear of a damaged relationship. I do not borrow from them, nor allow them to borrow from me. However, in my business I see it all the time. One place you can also try if not self employed, is with your current employer or even co-workers (of course having a good relationship with them is key). Also, get the information out to everyone and anyone about how you are seeking an angel investor, because you never know...just look at Evan's experience!
Re: Ryerson Angel Network Expands its Reach to Help Young Ent... - thanks for sharing very good information on Ryerson Angel Network Expands its Reach to Help Young Ent...........that will be so helpful......
Re: SEEKING PRIVATE OR ANGEL INVESTOR - Do a Google search for Angel Investors. You will have many options to choose from. I think SCORES is one but I am not sure. Don't email them, pick up the phone and contact as many as you can. You need too have a rock solid business plan for these investors to even smile at the notion. Good luck with your journey.


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