An angel investor may sound like the official title of someone from on high who’s come down to provide funding for startups on a silver platter. While those who’ve used these investors may prefer other terms that go below terra firma, they’ve been close to an angel for some nascent businesses. With trusted business experience, they can help lift a startup with promise by providing funding and joining in on a potentially beneficial partnership for both sides. But how you approach these investors is going to be everything in whether they take you on or not.
If you’ve watched the ABC series “Shark Tank”, then you know how these investors operate. Your presentation is going to be everything, along with plenty of preparation before and for the future.
Presenting a Workable Business Plan
When you approach your angel investor, you don’t necessarily have to come in looking like you’re about to encounter the Wizard of Oz. Most angel investors will be more down to earth than that, even if you still have to give them a presentation not unlike what you see on “Shark Tank.” What they’ll want to see first is your business plan and whether you’ve thought it out carefully and have a real strategy.
Mostly, they want to see if you have a marketable idea that has potential for growth. They’ll want to see proof that there’s a market for your product and what kind of growth it could have over a period of time the angel investor is involved.
The investor will likely take extra time to investigate these things before they write any check to you. It’s not going to be a quick process as “Shark Tank” makes it look out to be. You also have to make a decision about one other thing that angel investors always do.
Can You Survive After the Angel Investor Exits?
All angel investors are going to look at an exit strategy with your business, because none of them intend to stick with your business forever. They’re giving you funding because they want to make money off of your business themselves. Once they pull a profit, they look for the proper exit strategy to leave the partnership and leave it up to you from then on.
This kind of situation could lead to problems for a business’s survival if they’re still dependent on the angel investor’s role years down the line. It’s why you should plan another business strategy on how you’ll go it alone once the angel investor departs. If you’ve turned a considerable profit by then and have a fine working machine, you may never have a problem.
Nurturing the Business Relationship
Before thinking about the exit of the angel investor, you’ll have to focus on the business relationship you’ll have with that same person. Likely, the angel investor will be working with a group and confer with them about business matters along the way. Forbes notes that you’ll need to find an angel investor who works well with your personality if you want the partnership to go smoothly. All of them work very closely with the businesses they link up with, and it’s going to require communication on a daily basis.
The partnership side is perhaps your biggest challenge of all if you prefer to work alone and think only you know how to run things.