Angel investors mostly make one-time or regular investments in the budding startups. Generally, the family and friends of an entrepreneur can be considered as angel investors. Their basic aim revolves around helping the entrepreneurs grow and develop their business. And, in exchange for their financial contributions, they seek convertible debt or ownership equity.
Undoubtedly, a startup has to face a number of challenges in the initial stages, but it’s the persistence and wit of the founder that keep this business going. Finding angel investors and convincing them to invest in your idea can be a daunting task. A few tips to approach angel funders in India are:
- Approach the angel investors in your niche
Obviously, it won’t make any sense if the entrepreneur in the construction industry approaches the investors experienced in the health niche. Angel investors, being experts in a specific industry, apprehend your concept or idea well. Moreover, their established networks with other reputed investors can help your business expand and grow in the long-run. It will be a plus if you find the one with whom you can get along comfortably.
- Show them how successful your past business ventures were
Exhibiting a successful record of your previous venture/ventures can persuade angel investors to come on board and invest their capital in your business. No investor wants to have zero or negative returns on their capitals invested. The availability of your past records will make these informal investors believe that you can flourish your startup once the adequate funding is provided.
- You’ve got to know the numbers involved
Before pitching your idea to the angel investors, you need to be well-informed about the numbers involved. Analyze your gross profits, profit margins, revenues, profit and loss account, income statement, and financial position of your business. Angel investors want to know more about such numbers, and if you’re already prepared beforehand, they won’t turn down your offer or business plan.
- Make it a priority to do proper research
If you are a newbie in the startup world, you need to pick your target population and understand their needs and preferences first. Angel investors have been making investments in several products and services for years, and you cannot just present a vague idea to them believing that it will work. They’ll invest in you only if they are impressed by your research and the knowledge you have.
- Stay confident
Your idea is incomplete until you present it confidently to the angel investor. Make it a point to prove how passionate you are for your idea, how you’ll market it, and how it will result in higher sales. Show complete sincerity for your startup, and the investors will be tempted to invest in you.
Both angel investors and entrepreneurs have their respective obligations to perform. Angel investor will make as much assessment as possible of the insights of your business. And the entrepreneurs will have to ensure that they can showcase their best ideas in the most efficacious manner so that the investors don’t think twice before saying ‘YES’.