What is angel funding?
Angel funding is the funds provided by the angel investors. Angel funding is available to the small and medium enterprises and the start-up businesses which have already acquired the primary funding but need some extra financial support to take off the grounds. Angel investors are the wealthy businessmen seeking for making investments in the companies which have the potential to provide high returns.
Angel funding for small businesses:
It is not an easy task to get the angel funding for small businesses. As the angel investors are seeking the high returns on the investments the interested company has to make several efforts to get angel funding for small businesses.
The first task is to locate the angel investors to get angel funding for small businesses. Earlier it was quite a task to get angel funding for small businesses but now since the number of angel investors has increased many folds, they have organized themselves into networks and firms which provide angel funding for small businesses. Some of the angel investors interested in funding small businesses even have the web presence with their own website talking about the type of business they are interested in backing.
Here are some easy tips to find angel investors to get angel funding for small businesses:
- Enquire the local chamber of commerce about the angels interested in angel funding for small businesses. At local chamber of commerce they have the list of angel investor’s network and organizations which provide angel funding for small businesses. From here the angel investors can be located to get angel funding for small businesses.
- Regional and state economic development agencies work to develop businesses and may have the list of local and state angel investors which may provide angel funding for small businesses.
- Bank officials may also help to locate the angel investors of the local area who may provide angel funding for small businesses.
- Business development centers at the local universities may provide information about the angel investors providing angel funding for small businesses.
- Contact the association of business incubators to get information about the angel investors. These business incubators also use angel investors to get angel funding for small businesses in their incubators.
- Get in touch with your accountant and the attorney who may provide valuable information about the angel investors which may provide angel funding for small businesses.
- Register at the websites which introduce enterprises to the angel investors interested in angel funding for small businesses. You just need to register free of cost with the username and password. Create your profile with the basic and clear idea of your business to attract the angel investors to provide angel funding for small businesses. In the profile mention the amount of angel funding for small businesses required by you start-up the business project.
- Network in the local business community and talk about your need of angel funding for small businesses. You may accidentally meet your prospective angel investor in one of those corporate gatherings. Talk to your family and friends about your business and the need of angel funding for small businesses.
Expectations of the angel investor who may provide angel funding for small businesses:
- Angel investors which may provide angel funding for small businesses may wish to have a seat in the board of directors or a role as a consultant in the invested company in lieu of providing angel funding for small businesses.
- Angel investors who may provide angel funding for small businesses may seek to receive weekly, monthly or quarterly business reports and the profit summary to stay well aware about the growth of the invested company.
- Angel investors which may provide angel funding for small businesses almost always want ownership of the part of the company which is usually 15-30% of the share. The ownership of the company may be in the form of stocks or convertible debts.
- Most of the angel investors which may provide angel funding for small businesses wish to make follow up investments in the same company as and when the need arises.
- As they angel investors make highly risky investment by angel funding for small businesses, they wish their approval to be seeked before hiring new management team, purchasing or selling the stock and seeking for more funding.
How to impress angel investors to get angel funding for small businesses:
- Choose the angel investor with the passion in the same field as your business area to get angel funding for small businesses. There are high chances of attracting the angel investor to the area of his interest with lesser efforts than in the area which does not attract the angel investor. Example if you wish to get angel funding for small businesses in the field of fashion technology, seek for the angel investors interested in fashion.
- When forming the management team select those professionals which are familiar with the angel investors who may provide angel funding for small businesses.
- Prepare a clear business proposal to attract the angel investor to get angel funding for small businesses. The business plan should be clear and straight forward with the potential cost, market research, market competition analysis, environment analysis, risks, short term and long term goals, short term and long term business plans and the line of action. Angel investors who may provide angel funding for small businesses like to see those business proposals which reflect the potential of attaining good profits thus providing good returns to angel investors willing to provide angel funding for small businesses.
- Promote your business to get angel funding for small businesses. Promoting may take your words to the ears of the prospective angel investors who if get impressed may agree to provide angel funding for small businesses. Call the press conference, register your web presence, attend social corporate gatherings and talk about your business plans and the funding requirements to attract angel investors to get angel funding for small businesses.