Obtaining funding for your business venture is one of the first and most challenging obstacles you will face. It often determines the make-or-break point for most new entrepreneurs. In order to support your fledgling enterprise, you will need enough capital to support your startup through the beginning phases. Angel investors are an important part of the “startup ecosystem,” especially to those going through it for the first time. If you are interested in connecting with possible backers, here are some resources to help find an angel investor.
What Is an Angel Investor?
An angel investor is a wealthy individual who uses their own money to fund a new project or idea. This is a person who has a high net worth and can help startups gain the capital they need for their ventures. Unlike venture capitalists who require immediate returns, angel investors may accept equity in the company until the startup posts a profit.
Angel investors come from a variety of backgrounds with varying expertise and interests. Since they are investing their own money, many take a personal interest in causes closely aligned with their own. Look for investors who share the same ideals or support the same ethos that you do. An angel investor maybe more willing to take a chance on riskier ventures they believe in. New startup companies often seek an angel investor to provide the funding they need to get off the ground.
Where Can I Find an Angel Investor?
Finding an angel investor is now easier than ever before. You no longer need to rely solely upon word of mouth. There are thousands of online forums, blogs, and websites out there to connect angels with entrepreneurs. Many angels have also formed groups and organizations seeking out new proposals and ideas to invest in. With a little online research, you may find someone who shares a specific interest in your company or cause.
Online Groups and Syndicates to Find an Angel Investor
Angels tend to create their own communities and network within them. In the digital age, there are several online forums where you can directly connect. AngelList is a valuable resource that links entrepreneurs with angel groups and syndicates. If you can find an investor with similar views, you may be able to sell them on your idea.
Although it is not technically an angel investor, the Small Business Association has a wealth of knowledge for new businesses. It was founded to give assistance and offer advice to people navigating their roles and responsibilities. Local offices provide one-on-one counseling and assistance writing applications for loans as well. Their entire mission is to help you grow and expand your business.
The Angel Capital Association will also offer industry insights from an entire network of angel investors. Hosting over 14,000 angels who actively invest and discuss trends, you have a unique view into their world. You can also access the profiles and articles written by leading investors and company executives. Although it is not a funding source, it can give you a view into their world.
Angel investor Websites to Follow
You should also follow their websites to learn more about the investors themselves. Understanding what appeals to a potential backer improves your chances of receiving the startup capital you need. Here is a list of the top 25 sites and blogs from 2020. However, these two sites seemed especially helpful to new entrepreneurs and business ventures still in their infancy.
Many websites like On Startups center around new ideas in the tech industry. What makes this site so helpful is that it collects posts from several blogs. It discusses various angel investors and the startups they invest in. On Startups is particularly great for young entrepreneurs since they can learn from the experience of others in the industry.
Hyde Park Angel Network
Another excellent place to start looking is the Hyde Park Angel Network. This network specifically focuses on helping early stage startups to grow their business. They are currently most active in the Midwest, work primarily with health services, financial services, information technology, and industrial technology. It also provides advice about fundraising and guidelines to support growth. This community offers extensive support in the most crucial stages of establishing your business.
Sponsored Events and Annual Conventions
Lastly, do not underestimate the power of face to face interactions. In the business world, networking is just as important as having a great idea. Meeting potential angel investors in person gives you the opportunity to introduce yourself and your project. Sometimes angel investors buy into a venture because they believe in the person behind it.
While many sponsored events and conventions have been delayed due to social distancing measures, you can be certain they will return in the future. Annual conventions like Funding Post bring entrepreneurs, angels, and investors together. In the meantime, work on your elevator pitch and look for announcements of sponsored events near you.
Reasons to Find an Angel Investor
If you are struggling to bring your project to life, an angel investor may be the answer to your prayers. Not only do they provide financial relief, but also breathing room to expand your business or make a project viable. When you have already exhausted all your personal resources as well as those of family and friends, it may be time to consider finding an angel investor.
Making the right connections, you may find a backer who can give you a significant lump sum to cover overhead costs of your business without expecting immediate returns. Often times, they will take equity in the company as payment until the company succeeds. Since they have a vested interested in your success, they may also offer advice and guidance along the way. With the supportive backer, it is possible to take your idea and make it a reality.