What You Should Know About Angel Investors

An Angel Investor is defined as an investor who funds a business during the early phases of operations in exchange for some percentage of ownership. In some scenarios, this type of investor is the primary source of seed capital and is often the source that gets the proverbial funding ball rolling. The world is filled with success stories that got their start due to an Angel who saw an idea, believed in it, and seeded it. Angels, as they’re often called, are sometimes confused with Venture Capitalists. While there are a lot of similarities, there are even more differences that set the two apart.

If you’re considering a partnership with one of these now or at any point in the future, there are a few things you should know.

Angels are attracted to ideas, but more importantly, they’re attracted to the people behind those ideas. They want to see that the person, not the idea, that they’re investing in has the level of integrity and intestinal fortitude that it takes to win in business. The market is also important to them as they want to make sure the opportunity that is being reviewed is one that has potential. Passion and opportunity won’t be enough to win over a seasoned Angel. Those things are important, but they also want to hear (and read!) your plan.

An Angel Investor will ask all types of questions. They’ll want to know where you see your company in five years, where you see the market next year, how trends are monitored, etc. Basically, Angels want to know any number of things that will impact their investment and your business.

Finances matter to Angel Investors. If you’ve landed that all-important meeting with one, chances are they’re going to have a ton of financial questions – and rightly so! Typically, an Angel will want to know how much funding aside from theirs you’re seeking. From there, you can be sure this person will ask how long the funds will last and when they’re exhausted, will there be another round of funding, or will the business be self-sufficient? These are the types of questions an Angel is sure to ask, so before going into that meeting, review your financials and be ready to speak to those areas completely.

Marketing has been called the lifeline of the business and rests assured, any Angel you meet is going to want to hear your marketing plan. This is the time to market your business and show them it has what it takes to win. Talk about your social media and web plans, and how you plan on integrating technology into your marketing mix. Customers are a large part of marketing so it might not be a bad idea to develop a customer profile, detailing psychographics, and buyer behaviors. If public relations is going to be a part of your marketing efforts, be sure to detail those. A good rule of thumb to remember is that while you’re speaking to the Angel about your marketing plan, you’re also marketing to the Angel. Whatever you do, do not miss out on this valuable opportunity to secure the funds your business needs.

Angel Investors are key players in the business world. With each passing year, their presence becomes all the more important as more and more small businesses seek funding. Angel will ask a ton of questions and the first one will almost certainly be about your business plan for investors. They’re going to want to see your business plan, how you’ve mapped out your success, the various stages of growth, resource allocation, finances, and a host of other areas.

When that time comes be sure you’re armed with a business plan from The Coley Group. Our seasoned staff of MBA business plan writers can create the type of document that gets you noticed and set you on the path toward finding success. If you’re in the market for a business plan, feel free to call us or contact us for a free quote today!