If you plan to fund your startup with external capital, you might consider seeking angel investors. Angel investors are affluent individuals who provide capital for a business startup in exchange for partial ownership equity. Angel investment often serves as a first round of financing after initial seed money from family and friends. Additionally, angels are frequently successful entrepreneurs, business executives, or attorneys who can offer management, leadership, and guidance to your startup.
This series of posts aims to provide insights into the criteria angels consider when investing in a startup. These posts will help you understand an investor’s mindset and assess whether they would be willing to invest $100K in your business. Use these posts as a tool to evaluate your business’s strengths and weaknesses. Regarding funding options and methods, please refer to my post titled “Funding Your Start-up The Jugaad Way” for alternative and potentially less costly ways of raising capital. Regardless of your chosen funding path, it’s crucial to prepare a well-crafted investment pitch that can significantly impact the success of your startup launch.
#11 Technology and the Big Sell
Facebook, WhatsApp, Alibaba, Zoetis, Twitter, and Lending Club are all examples of companies that have achieved remarkable success and financial success. It’s easy to get excited about the prospect of starting and investing in such companies. However, many people also dream of starting a passion project and building it into a sustainable and successful business that provides a comfortable lifestyle. It’s important to understand that investors have a tremendous influence on the form these companies ultimately take. Investors are successful and affluent individuals who are looking for ways to make money. While they may be interested in the intrinsic value of your product, their primary concern is the return on investment.
It’s worth noting that the world is often driven by money, and investors are more likely to invest in innovative and groundbreaking ideas rather than incremental improvements to existing products and services. They will carefully evaluate your product to determine whether it meets the needs of the market versus disruptive and has the potential to generate significant revenue. If your product idea is complex and involves esoteric technologies, investors will approach it with caution. The underlying technology must be proven and verifiable, and you must be able to demonstrate a clear path to market and a monetization plan.
If you’re considering starting a food-related company, it’s important to avoid applying to angel investment companies that focus on technology. Instead, take the time to research and find an angel investment firm that aligns with your needs and goals. Regardless of the nature of your great new idea, it’s crucial to present it in a clear, thorough, and concise business and marketing plan. Thrive Venture can help you develop your plan and find the best-fit angel investment firm for your needs.
– Tyler, Founder and Principal Consultant
Thrive Venture Consulting—connecting people and ideas.