Angel Investors are those wealthy individuals who are willing to invest in the early startups and in return gets equity ownership interest. They can also be a great mentor for the entrepreneurs since their money is on the line they are motivated by the success of the business. Attracting angel investors for the business is not the easiest thing. Also, since they become part of the company, it is important for the startup to find the perfect match of the investor. Here are some key insights that will help you find a productive match of angel investor:
Create a perfect team– Angel investors invest their money in the ideas and people of the startup. It is very important that they perceive the management team as capable of delivering the company’s vision and goals. The founders should know what they want for the company and should have a clear view of the future position. The team should have people with complementary skills.
Be transparent and prove your worth- It is very important to be transparent to the angels. It is the only way to be on the same page with the investors. As they are going to be a part of the company, it is necessary to let them know about the risks upfront. The startup needs to evaluate their ideas before putting them in front of the angels. The angels will invest if they find the idea and model promising and can trust the founders.
Potential Return on Investment– Angels will invest when they see it will benefit them as well. Forty-nine percent ranked potential ROI as their top motivator for making an investment decision. Besides financial returns, a lot of investors seek to solve the challenges of specific sectors with the business they fund. It is important to know and understand the investor and give a pitching likewise.