By Sthitaprajnya Panigrahi
If you are planning to start a new business or expand your current one, funds become your priority. As a small business owner, sometimes the chances are quite less of finding a traditional bank financing. Since getting the necessary capital to fund your business can seem like a big hurdle, your next best option as an entrepreneur is to look for angel investors who can assist you in your financial needs as well as guidance for your business. Although most entrepreneurs are doubtful about working with angel investors, many others have no idea about finding angel investors or how to approach them.
Some of the innovative approaches to reach angel investors are mentioned below.
If you want this approach of you to work, you need to have a prolific track record of being successful with your prior business ventures. But if you are facing complications to keep your business afloat, you might experience a lot of added stress of convincing angel investors to come on board. Investors are majorly concerned about your revenues and making profits. They want to see if you can multiply the money, they are investing in you, and they won’t bail out on you, when times are tough. If your business is doing well and your numbers are good, then you are in a favourable position to ask for money and they will be happy to join you.
Before you go ahead with your pitch before an angel investor, spend some time to analyze your numbers till now. Some of these data might include information about your gross profit, profit margins, expenses, sales over the past year as well previous years, balance sheet, income statement, and so on. After you've spent a significant time comprehending these documents, you won't get confused while answering the investors during your pitch. This will boost your confidence and will in turn stimulate assurance in your investors to put money in your business.
You might believe that your product is going to take the world by storm, but rest assured, an experienced investor who is equipped with years of expertise in introducing new products might not agree with you. Since you have just commenced your journey and you are at an initial phase, you have to do ample of research and development, discover your target audience, and have enough knowledge to smartly predict the success of your venture in the future. Only when you have a sturdy plan and ideas about how to execute it, an investor will show interest in your business.
You should never ask an angel investor not from your domain or who has nothing to do with your industry to invest in your business. Angel investors are exclusively known to be equipped with deep experience in a specific segment or industry. As a business owner, you should look for investors who can not only comprehend your business idea but who also has contacts within the industry to help your business thrive.
The investment you come seeking from the investors, shouldn't be your salvation to success but you must have one contingency plan. Try to prove your investors that you are doing everything in your power to nurture your network, promote your business, and enhance sales. If you show your investors that you are not confident and you are desperate for their help doing your pitch, then it might not take a favorable term. Lure the angel investor to join you by highlighting your past wins, so that the investor will develop a desire to be a part of your business venture.