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7 Tips to Attract Angel Investors towards Your Start-up.

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7 Tips to Attract Angel Investors towards Your Start-up.

 

When it comes to funding a start-up, many knock the doors of banks, and venture capitalist while others look towards angel investors with hope. Getting angel investors on board has its own significance and advantages as compared to venture capitalist and banks.
Angel investors have high risk taking capacity and can turn the fortune of your company to a whole 360 degree. But to convince an angel investor is not an easy task. It is thus important to understand what exactly an angel investor wants to see in your business at the time of ‘idea pitching’.
A Viable Exit Strategy
Any investor is hopeful to make a good gain in his/her investment. However, not all make profits in their investments. Any investor thus looks out for a viable exit strategy when he/she thinks that things don’t work out as per their goals. While most of the angel investors are patient enough to encourage the company in tough times too but it is natural for any lender to know how you are going to pay back if things do not executes as par plan or the company suffers losses. Giving the rights to sale the shares or gaining money from the mergers are some of the common exit strategy investors look to safe-guard their interest.
Provide the Platform to Actively Involve
Now-a-days many successful people want to invest into the areas which they have expertise in or in the areas they find thrilled about. Such investors not only want to share their money for your business but also ready to go an extra mile to make your entrepreneurial journey better and smoother. Investor these days want to have a say in your business for a greater success. They want to actively participate in developing your business by acting as a mentor for your company. By proving them such a liberty can not only make them feel valued but also helps your business with the expertise and knowledge that your angels carry.
Find the Thrill Factor
Always remember that most of the angel investors are successful entrepreneurs who have plenty of surplus money in their bank accounts. They are already wealthy enough and do not need extra money to sustain their lavish lifestyle. They just want to hear an idea and want to invest their money for the idea that gives them a thrill. However, every angel investor has his/her own reasons for investing in any start-up. Experts have categorised such investors into three categories: the economic, the hedonistic and the altruistic.
An economic angel investor is more concerned about gaining extra money on his/her investment while a hedonistic angel investor is most attracted with the excitement of creating something new. Contrary, an altruistic angel investor is thrilled by helping the community with the success of start-up in terms of more job creation, allied economic progress and other. Therefore, it is necessary to do some basic research on knowing investor’s thrill factor so that you can give extra stress on it during the investment pitch.
No Hockey Sticks
Entrepreneurs always want to impress investors with fascinating numbers concerning their future growth. Experts believe 90% of the businesses show dramatic initial growth numbers that most of the times go off-the-charts. Many refer to it as hockey stick and 99% of the time it does not make any impact on investors. Instead, unrealistic projections and unrealistic numbers can turn-off the mood of your angel and made them think again about investing in your idea. Smart investors like realistic numbers and impress by real-projections.
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