I Need an Angel Investor. How Do I Make My Choice?

You are ready to turn your business project into a real venture. You have a certain amount of money from your savings, as well as from family and friends, but you still need more capital to get things going. Bank loans are impossible to obtain at this stage, as the risk of failing is too high, the only alternative you have are private investors.

Am I Eligible?

Angels invest in start-ups with a very promising ROI. Is your business eligible? If you have a very clear vision of the process, you are able to make pertinent financial projections and are also a skilled presenter, capable of persuading prospective business partners to provide you their money, you may be very close to getting funded. But being “very close” does not necessarily mean being “there” and most investors stumble before getting what they want for unsure reasons.

Where Do I Search?

One of the reasons that cause a stressful delay in raising funds is connected to the disorganized manner in which investors are (not) selected and contacted. If you have some acquaintances that could refer you to some angels, and referrals are very appreciated in this case, you may still not obtain the money. It is not that your idea is uninteresting, your business plan needs to be revised or you lack public speaking abilities. The problem is that the selected investors may have no experience in your field and they’d rather not risk putting their money into something they don’t sufficiently understand.

What Are the Selection Criteria?

What you need to do is organize your list of investors, so that they perfectly match your company, considering the following criteria: stage preference (and most angels invest in start-ups, only some of them being also interested in follow-on investments), industry preference, amount of money they usually provide, proven track of success with other funded ventures. The more familiar with your activity sector they are,the more domain knowledge they have, the more benefits you will have regarding management assistance and advice in difficult situations.

The choices you make in the start-up phase will later influence the success rate of your business, so remember to choose wisely and keep the gates open for new rounds of investment.