Catching an Angel's Eye: Attracting Angel Investors for Entrepreneurs
CLEVELAND, July 28 /PRNewswire/ -- Attracting angel investors requires an understanding of what this unique breed of investor is seeking. Stand out from the startup masses with these insights from experienced investors, and you'll be more likely to catch the eye of an angel. "To attract angel investors, entrepreneurs must ensure that their startups are investorready," said Tiffan Clark, Marketing Vice President of JumpStart Inc., the venture development organization behind IdeaCrossing (www.ideacrossing.org), a free online resource that connects entrepreneurs with investors. In the investment world good ideas are everywhere, while superb execution is a rarity. Remember that angel investors are typically savvy entrepreneurs themselves who demand compelling reasons to invest based on hard data. Impress angel investors with your understanding of your industry and demonstrate your experience. Be prepared to paint a detailed picture of your competitive landscape and explain why your product or service has a clear advantage. Angels want to see a tested, working product, and are impressed by potential customers already lined up and committed. Demonstrating you have secured paying customers puts you ahead of entrepreneurs possessing only ideas on paper. When attracting angel investors, be prepared to invest your own money. Entrepreneurs who are unwilling to assume personal risk are typically not taken seriously and might be passed over for funding. In addition, be prepared to show potential angel investors how you will provide return on their investment and the time frame for which you expect it to occur. Remember, angels are considering your idea not just because they think it's a good one -- they see it as a personal investment opportunity. Other ways to attract angel investors include: -- A solid business plan. Include specifics such as financial projections, marketing strategy and market specifics in your business plan. -- A winning management team. Angels know they are actually investing in people, so demonstrate your management team has the skills to take your business to the next level. -- Opportunities for involvement. Many angels seek to actively participate in developing your business. Take advantage of these experienced business mentors and benefit from their knowledge, contacts and creativity.
-- A sound exit strategy. Prospective angel investors typically expect upfront time frames for sale of shares or sale/merger of the company as a vehicle for reaping return on their investments. -- Leverage the Internet. Connect with angel investors using online business communities such as IdeaCrossing (www.ideacrossing.org) to find potential investors who are right for you. About IdeaCrossing IdeaCrossing is a free Internet resource available to all individuals and organizations with an interest in supporting and promoting entrepreneurial activity. IdeaCrossing helps entrepreneurs find the assistance and investment capital they need to launch promising new business ventures. Additionally, IdeaCrossing serves the Angel and Venture Capital communities by identifying and screening new investment opportunities. Simply stated, IdeaCrossing is about creating the connections that build businesses.