Angel Investors Work Miracles
October 29, 2018
People say “it takes money to make money,” particularly people with experience running a start-up or small business. Just as it takes a lot of nutrients for a tiny acorn to grow into a mighty oak tree, so too does it takes capital from investors for a concept pitch to grow into a sustainable business.
Most investors are Venture Capitalists, associates of a firm with board members and analysts who carefully research and calculate market trends. These investors tend to only back safe bets, tried and true ideas with high return and low risk. Remember, investors are as bound to the “it takes money to make money” model as the rest of us. Many can’t go throwing their money around willy-nilly, not when their livelihoods depend on turning a profit from their portfolio. As such, they often exert a high level of involvement in the businesses they support, assuming a certain level of control to be sure their money is being put to good use.
This can make it more difficult for experimental start-ups staffed by less experienced entrepreneurs, or for small businesses in established sectors that simply aren’t as profitable as others.
But then there are the Angel Investors.
Angel investors are individuals with a passion, and a nice fat wallet to invest in it. Traditionally, many are older or well experienced business people who want to support the up-and-comers in a particular field, providing both their financial support as well as useful advice to promising young entrepreneurs with projects the Angel Investor sees great potential in. However, thanks to social media and crowdfunding websites, people with ideas to develop and people with money to spare can connect like never before, breathing life into small and large projects that were never possible before.
However, while crowdfunding websites like Kickstarter or GoFundMe are wonderful tools for more creative ventures, the kind who already have the skills and tools to attract a specific demographic they know are interested in supporting the media projects they’re developing, this model isn’t well suited for all business types.
After all, an international trader trying to gain funding for an export business won’t necessarily have the skills or charisma to persuade an audience the way a cartoonist or game designer would. And even if they do, they’ll need a lot more than small donations from the general public to make their business dreams a sustainable reality. After all, crowdfunding sites like those above are geared more toward funding individual projects, not growing businesses. Still, the projects that do get funded make excellent proof of concepts for the small teams designing them, and can often be used to attract more traditional Angel Investors into supporting the team itself long term.
That is what makes Angel Investors so notable, and in many cases, so noble.
Rather than being motivated strictly by profit, their interests and investments are for the betterment of the field and those participating in it. Indeed, a study shows that, while the Venture Capitalist community is dominated primarily by White Men out to make a buck, the Angel Investor community has more Women and People of Color who consider the ethical impact of their investments as well as the financial. Female-founded start-ups and pitches with greater focus on social over economic impact aren’t always popular with Venture Capitalists, yet appeal to like-minded Angel Investors looking to help make a change in the world.
Like their name implies, these benevolent souls can deliver your start-up to salvation, and lucky for you there are plenty to choose from in a variety of locations.
Sweet Tips from Ally
-Keep your investors’ mindset in mind, understand their interests and passions before pursuing them so you won’t waste their time or yours. Angel Investors occasionally network with each other, so making a bad impression on one could potentially ruin your odds with others before you even get the chance to try.
-Consider the socioeconomic factors of your business as much as the fiscal factors when constructing your pitch, customize each presentation to maximize appeal to the particular investor you’re showing it to. If you find your start-up or project lacks traits that investors find appealing, consider how to add them in before seeking funding.
-Look for Angel Investors who have experience in the industry you’re pursuing, accept any and all advice they offer, from market tips to recommended connections. Anything that doesn’t initially appear relevant to your work could still be insightful on its own and repurposed to meet your needs.
Most investors are Venture Capitalists, associates of a firm with board members and analysts who carefully research and calculate market trends. These investors tend to only back safe bets, tried and true ideas with high return and low risk. Remember, investors are as bound to the “it takes money to make money” model as the rest of us. Many can’t go throwing their money around willy-nilly, not when their livelihoods depend on turning a profit from their portfolio. As such, they often exert a high level of involvement in the businesses they support, assuming a certain level of control to be sure their money is being put to good use.
This can make it more difficult for experimental start-ups staffed by less experienced entrepreneurs, or for small businesses in established sectors that simply aren’t as profitable as others.
But then there are the Angel Investors.
Angel investors are individuals with a passion, and a nice fat wallet to invest in it. Traditionally, many are older or well experienced business people who want to support the up-and-comers in a particular field, providing both their financial support as well as useful advice to promising young entrepreneurs with projects the Angel Investor sees great potential in. However, thanks to social media and crowdfunding websites, people with ideas to develop and people with money to spare can connect like never before, breathing life into small and large projects that were never possible before.
However, while crowdfunding websites like Kickstarter or GoFundMe are wonderful tools for more creative ventures, the kind who already have the skills and tools to attract a specific demographic they know are interested in supporting the media projects they’re developing, this model isn’t well suited for all business types.
After all, an international trader trying to gain funding for an export business won’t necessarily have the skills or charisma to persuade an audience the way a cartoonist or game designer would. And even if they do, they’ll need a lot more than small donations from the general public to make their business dreams a sustainable reality. After all, crowdfunding sites like those above are geared more toward funding individual projects, not growing businesses. Still, the projects that do get funded make excellent proof of concepts for the small teams designing them, and can often be used to attract more traditional Angel Investors into supporting the team itself long term.
That is what makes Angel Investors so notable, and in many cases, so noble.
Rather than being motivated strictly by profit, their interests and investments are for the betterment of the field and those participating in it. Indeed, a study shows that, while the Venture Capitalist community is dominated primarily by White Men out to make a buck, the Angel Investor community has more Women and People of Color who consider the ethical impact of their investments as well as the financial. Female-founded start-ups and pitches with greater focus on social over economic impact aren’t always popular with Venture Capitalists, yet appeal to like-minded Angel Investors looking to help make a change in the world.
Like their name implies, these benevolent souls can deliver your start-up to salvation, and lucky for you there are plenty to choose from in a variety of locations.
Sweet Tips from Ally
-Keep your investors’ mindset in mind, understand their interests and passions before pursuing them so you won’t waste their time or yours. Angel Investors occasionally network with each other, so making a bad impression on one could potentially ruin your odds with others before you even get the chance to try.
-Consider the socioeconomic factors of your business as much as the fiscal factors when constructing your pitch, customize each presentation to maximize appeal to the particular investor you’re showing it to. If you find your start-up or project lacks traits that investors find appealing, consider how to add them in before seeking funding.
-Look for Angel Investors who have experience in the industry you’re pursuing, accept any and all advice they offer, from market tips to recommended connections. Anything that doesn’t initially appear relevant to your work could still be insightful on its own and repurposed to meet your needs.
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