Angel Investors can mean life or death for small companies, and can give your business the urgent capital that it needs to grow and develop. There are a few things that you can do to help attract investors to your company, but the main thing is to make sure that you make people believe that they will get a solid return on their investment. There is no way that people will pump money into something unless they are reasonably certain that their money is safe, and that it will grow in the future.
What type of investor do you want?
Since angel investors are all individuals, there is no one-size-fits-all way of attracting them. Before you do anything to attract anyone, you need to decide exactly what type of investor that you’re looking to attract. Are you looking for someone who is excited by the prospect of creating something new, with a real passion for the product or service you are providing? Are you looking for a pseudo-philanthropist, someone who wants to see a good cause being undertaken, who is not so driven by profit? Do you want somebody who is purely interested in figures; who will be pushing for high returns? Or are you looking for something else altogether? Once you have decided exactly who you want, then you can start to focus on attracting your investor.
Focus your mission statement
Make sure that everything your business does is focussed around what you want to achieve. This should be something important to you and the business, but also should be something that your desired investor will be able to latch onto. Everything about your business should be coherent, make sure that none of your motives contradict each other and that you have a clear business identity.
If you have to hire extra help, then do so. Your books will have to balance perfectly, with absolutely no loopholes. If an investor finds a problem with your numbers then they will pull out straight away. Your finances have to be honest and correct or you won’t stand a chance of attracting investment.
Make sure you show any potential investors that there is room for them to be actively involved in your business. There are very few investors who will be happy to part with their money and then just sit back and wait to see what happens to it. Let them know that they will be consulted on major decisions and that they can see first-hand what is going on in the company.
There will be a point at which your investor will want their money back, and the profits that you have generated for them. They will want to see before they invest that you have an exit strategy lined up for when this eventuality does occur. Make sure you have thought through the process of how the business will make the transition to cope without the involvement of your investor.
At the end of the day, if you have a solid business plan which is destined for profit, you should be fighting off the investors. Just make sure that you do everything you can to make your business look attractive. Don’t let small mistakes get in the way of a huge opportunity for you and your business.
About Richard McMunn: Richard is the author of this post and owner of www.How2become.com, the UK’s leading training and recruitment specialist for careers. The focus is on providing applicants with the knowledge they need to pass any selection processes. The site currently offers over 140 different titles. You can also engage with How2become on Facebook