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 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 “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.
#10 Compatibility
There are various investment types within the angel investment community. Their backgrounds and interests are diverse. Naturally, someone with a technology background would be more comfortable investing in an IT startup than in a manufacturing company. Therefore, finding the right fit for both the investor and the startup is crucial.
In the long run, finding an investment group with a diverse resume can be beneficial. Look for a group with successful professionals and entrepreneurs in various fields, such as law, technology (software and hardware), sustainability, manufacturing, product design, marketing, business development, and military service. With a diverse investment group, you’ll not only gain financial support for your business but also access to coaching, mentoring opportunities, knowledge, and a vast network of contacts.
When you’re ready to meet with angel investors, be transparent about your interest in having a strong and diverse team to guide your company to success. They’ll be impressed and appreciative. Showing respect and recognition for their contributions beyond financial support is a sure way to earn their trust and build a relationship.
– Tyler, Founder and Principal Consultant
Thrive Venture Consulting—connecting people and ideas.