It is extremely hard to find an angel investor willing to back your business idea with their own money. The reason is that investors prefer to invest at a later stage of business development, when you have already done all the legwork to demonstrate that your idea is a viable business concept that has gained traction in the marketplace. But how can you even reach this point if you have no adequate financial resources available to develop your concept?
In this article, I will share with you some tips for success in securing initial start-up investment from my personal experience. I had an idea for a tech start-up last year and have managed to find an angel investor who, after careful consideration, decided to invest in my concept and make it happen. The process of developing my idea into a launchable product is currently going ahead. Watch this space!
So if you have a business idea in which you need investment, here are my key tips:
- Make sure you are passionate and enthusiastic about your business idea and that you believe it will be successful. If you have doubts about its potential success, then it is probably better to wait longer and refine the concept. Of course, success is not guaranteed, but if you believe in something strongly enough, you have a better chance of persuading potential investors to start working with you.
- Have a one pager business plan prepared so that you can talk it over in detail at an interview and pitch stages of the process. You don’t necessarily have to have all the numbers worked out at this stage but you need to understand your target market, the reasons why you think your business will be successful, challenges you may face and of course the current competition.
- Do detailed searches for potential angel investors and understand their background – you can do this through Google, LinkedIn and other online sources. There is no point in approaching investors whose areas of expertise are completely different from the industry you would like to operate in. I also recommend you check which investments they have made to date, in which sectors and whether any of them have seen success. Also it is worth understanding whether the prospective investor takes an active or passive approach. I have personally found that an active investor is a big advantage to start-up success as they get involved in the day to day planning and strategizing and can be a great asset on the path to success.
In the next post, I will be sharing some tips on how to approach investors in order to secure an initial interview. If you have a start-up idea and need coaching on pitching, refining the idea and business plan, please don’t hesitate to get in touch.