Who are Angel Investors and how to get funding from them?

Angel Investors are wealthy individuals who are looking to invest in exciting businesses. They will normally invest in return for a share of equity in the business. Beyond cash, they often have skills, knowledge, and networks that can add value to your startup or businesses.

Angel investors look to make a series of investments as a part of a portfolio and the amounts they invest can vary.

How to Get Angel Funding 

Getting investment funding is not as simple as applying for a loan and waiting for approval. You need to make sure to find an investor, determine what information to present, then prepare and deliver your pitch. Once an angel investor is interested, then you need to discuss some of the terms, agree on a funding structure, and follow up with the investor until you receive funding.

  1. Network & Find Angel Investors

You may already have connections to an angel investor that you are not aware of. The best way to find out is to network with people you already know. Your current business and personal connections may be able to introduce you to potential investors.

Some potential ways to find angel investors include:

  • Get feedback on your product from experts.
  • Inquire with friends, family, and your business network
  • Connect with other business owners
  • Canvas professionals around the space
  1. Have a Preliminary Meeting

Once you have got to know a potential investor, have a preliminary discussion with them. This conversation may not be in the form of a formal meeting but could be a phone call or email exchange. The point of this conversation is to give your elevator pitch and to find out what aspects of your business are most essential to the investors. Once you know the areas of interest to the investor, be certain to address those specifics in your pitch deck.

  1. Prepare Your Pitch Deck

Your pitch deck is mainly one of the first introduction potential Angel Investors will get to your business and should be tailored to the specific investors to which you are presenting. Having a well put together and professional looking pitch deck can be so much crucial to securing funding. The average pitch deck is roughly 19 pages or slides and covers the various details about your proposal, which includes your problems your product is solving, the competitive market, and the financial needs of the market.

  1. Present Your Pitch

With your pitch deck complete and your product ready to be debuted, it is the time to present your business to the world of Angel Investors. With the help of your pitch deck as a guide, you will need to present your proposal to Angel Investors, and even highlight to them what makes your business and product unique and innovative. A solid and well-rehearsed presentation is imperative to the success of your investor pitch.

  1. Discuss Terms

Firstly, when you presented the pitch, and the angel investor has expressed interest in your startup, you will discuss the terms that would be associated with accepting the angel funding. These terms are negotiable and require both parties to agree to move forward.

  1. Agree on Funding Structure

Of all the terms and conditions that you will negotiate concerning receiving angel funding, the funding structure will likely be the most confusing. Moreover, you must also need to understand the terms you agree to, which includes when and how the angel funding will be repaid.

  1. Follow Up Regularly

It can even take some time between pitching your business to an investor, working out the details of the deal, and receiving funding. Then, follow up regularly with the investor to answer questions they may have, and to determine expected timelines for funding.

Open and continuous communication with the investor will be essential as you become business partners, and establishing this rapport early sets the stage for future discussions.

  1. Court Multiple Investors

Due to the uncertainly of receiving funding from any single angel investor, it is wise to court multiple investors. Even if you think that an investor will give you funding, having additional options lined up can save time if the investor backs out for any reason.

  1. Issuance of share certificate

After the investment of funding, the share certificates have to be issued to angel investors which act as a proof for the ownership of the individual in the company.

Also Read: What are the different Stages of startup funding?

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