Tips: Raising Money - Ten Tips to Attract Angel Investors

Tips: Raising Money - Ten Tips to Attract Angel Investors

Angels
provide additional value beyond the funds they provide. Many were
successful business owners and entrepreneurs who can also bring
you valuable industry experience, executive knowledge, creative
ideas and contacts. When targeting angels, here are some
guidelines.

1.	Build a Convincing Case: Angel investors may be willing to take on more risk than most, but they still need to see a well thought out plan with a product that has a documented “must have” need and a competent team behind it. It is rare that an entrepreneur can raise money from angels without clearly defining the competitive landscape of the business and how the product has a clear competitive advantage over others. Investors will want to know the barriers to entry. Namely, how you will keep competitors from being in the same exact business. Some barriers to entry might include patents, trade secrets and proprietary processes.
2.	Create a Prototype and Line Up Beta Testers: Angels do get involved in the early stages of a company, but not usually before there is a working model of the product and potential customers have committed to test the product. Having a prototype will greatly increase your chances of attracting angel investors. Demonstrating that you can get paying customers in the real world puts you far ahead of entrepreneurs who simply have a business plan and an idea. Later stage companies need to show they have accomplished revenue growth and have paying customers who validate their pricing strategy.