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The Truth About Angel Investing and How to Succeed Without It

Guest post by: Adam Hoeksema

Article Overview: According to Angelsoft.net, the world’s largest angel investment deal platform, only 2.3% of angel investment applicants successfully raised capital in the past 12 months. Since the odds are working against you, maybe you should focus on building a profitable business first and foremost. You may just find that you can succeed without investment if you do the following:

The Truth About Angel Investing and How to Succeed Without It

According to Angelsoft.net, the world's largest angel investment deal platform, only 2.3% of angel investment applicants successfully raised capital in the past 12 months. Keep in mind that companies who actually go through the process of submitting an application for angel investment are typically already successful and promising businesses. The point is that less than 3% of high potential startups actually secure angel investment funding. Since the odds are working against you, maybe you should focus on building a profitable business first and foremost. You may just find that you can succeed without investment if you do the following: 1. Prove a Business Model - When you are starting a business you need to prove a business model sooner rather than later. Are people willing to pay enough for your product or service that you can make a profit? If you can prove profitability and positive cash flow, then your next step is to show scalability. Your business model works on a small scale, but can you expand?

2. Gain Some Traction - One of the most difficult issues that small business owners face is gaining and sustaining traction. There are millions of sole proprietors that have basically created their own job. They find enough business to support themselves and their family, but they can't break beyond that level of business. You might consider blogging, speaking engagements, and simply hiring sales people to help your business gain traction.

3. Revenue Based Financing - Once you have a proven business model that is generating positive cash flow, and you have started to gain traction to the point you can't handle your growth any longer, you might need growth capital to keep growing. At this point you might actually have a chance at raising angel investment because you have already proven yourself, but you might not want to give up ownership in your company. Because you have already built a successful business you have options at this point. Instead of giving up ownership in your company, you might consider a new fad - revenue based financing. RevenueLoan is one such opportunity where you can secure financing that is paid back through a percentage of revenue instead of a percentage of ownership.

So the truth is, securing angel investment is hard. In order to raise capital you will need to prove a business model, and you will need to gain traction. If you need to do these things anyway, then why not simply focus your efforts no building a great business, and funding opportunities will come. So go build a great business!

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Article Tags: angel investment, bootstrap startup, how to bootstrap your startup



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
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: Invest in Real Estate or Stocks? - I want to reiterate what Barb said, be prepared for the long run. Investing in stocks and real estate myself, I highly recommend learning as much as you can about both. Find a great mentor in both areas as well if you can. But always, always, remember that you buy both and WAIT. There's no flipping around or you can lose alot! Jude
Re: Hi From START.ac CrowdFunding - Welcome, this is the place to be online for entrepreneurs. Appears that your operating as an Angel funder. Big list of higher risk topics, but small dollars- Good luck with your venture


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