How to Secure Funding from Angel Investors
August 19, 2024
Angel investors are simply very wealthy people who would invest their personal funds in start-up businesses that they are certain have large growth potential for an exchange of equity in the business. These people usually know a lot about businesses to be able to ascertain whether a business has great chances of booming and whether their investment will yield returns. As a start-up real estate investor, it would do you a great deal to pitch a business with very large potential to people in this group to be able to secure funding. The funding gotten from them is paid back in equity, so you do not have to bother about “paying back the money.” You just need to focus on ensuring that your investment is followed by informed decisions and there is no flop on your end.
To secure funding from angel investors, you need to begin by identifying potential investors in your niche. Knowing that they have an interest in what you do would increase the chances of their investment because they would have vast knowledge and understanding of the market. You have to complement their understanding of the market by developing a very solid pitch, showcasing your business model, market opportunity, and growth potential. Your pitch should also highlight the unique value of your business plan. Essentially, show how you stand out. As a start-up, you also need a clear plan for upscaling as the business grows. You can network and meet up with them by attending conferences, starting-up meetings, and also leveraging social media.
Your business plan is what your pitch carries, and you need to develop one that is comprehensive and very convincing. Your business plan should outline what your business is about, beginning with what it would look like when you start, the model you plan to follow, your market analysis and financial projections, and finally, your marketing strategy. Also, you need to show understanding for the other side of the market—the buyers. State your target audience while proving that you understand that market and the customer’s needs. This way, you can prove that you know the value of what you are offering and the growth potential in it.
With angel investors, you need to demonstrate a framework for progress and how you plan to keep track of it. Show how different key metrics, such as revenue growth, user acquisition, and so on, develop the traction of your business. You also need to show foreseen progress in product development, marketing, and sales. What this proves is that you have done your own market research and analysis, and your business is predicted to stand strong through whatever may arise in the future market.
Working on securing funds with angel investors would require you to be prepared, prompt, and persistent. There is a need to anticipate possible questions such as “What problem are you solving?” “How big is the market opportunity?” “What is your competitive advantage?” “How will you use the funding?” etc. With a solid business plan and pitch, you may have already answered these questions, but still prepare for follow-up questions. Do not back down, and be sure to build relationships and follow up with these investors after your presentation, whether or not it yields a positive outcome. With these set in motion, you have very high chances of securing your desired start-up funds from angel investors.