If you’re starting a small business, you’ll need some funds to get your new venture off the ground. Raising money can be one of the hardest parts of being an entrepreneur; one of the most effective ways to procure the funds you need is to work with an angel investor. An angel investor isn’t the same as a venture capitalist: This individual investor provides funding from their personal wealth in exchange for equity in your company.
Let’s look at some simple ways to locate an angel investor and get him interested in your startup.
1. Consider Family and Friends First
Your family and friends should be the first place you look for an angel investor. The people closest to you will be aware of your ambition and drive, and they’ll have fewer doubts than the average investor. Although friends and family are your best bets for securing initial funding, there’s no need to despair if you strike out in this arena: You’ll just have to work a bit harder to find alternative options.
2. Research Local Angel Groups
Hundreds of organized angel investor groups exist in the United States, and most cities have a couple of local groups. It can take some research to locate a good angel group, but once you find one, you’ll have access to a large pool of potential investors.
3. Check out Small Business Development Centers
Another way to connect with potential angel investors is to contact small business development centers (SBDCs) in your local area. Not only can these centers connect you with lists of prospective investors, but they also offer valuable training and assistance for small business owners. The Small Business Administration’s website is a good place to look for the SBDC nearest you.
4. Seek out Economic Development Entities
In addition to SBDCs, you can also get in touch with economic development entities. Some of these entities are government-operated; these public entities offer the option of state grants, which could be a real game-changer for your small business. Other entities are private organizations, such as business groups and non-profit organizations. Although the private entities tend to be more community-focused and have more flexibility in what businesses they can invest in, they also have less access to funding than public entities.
5. Try Crowdfunding
If you want to cast the widest possible net, you may want to consider equity-based crowdfunding. More and more angel investors are going online to find investment opportunities; in response, hundreds of investment crowdfunding sites have been developed. Do your homework before jumping on the crowdfunding bandwagon: You want to make sure you choose a site with the best network of investors.
Securing initial funds for your new business is one of many critical tasks faced by entrepreneurs. Incorporating your company is another important step in the process. Don’t take chances with your business venture: The incorporation specialists at Inc. Plan (USA) can ensure that the job gets done right. Contact us today for a free 30 minute consultation.