When trying to seek funding for your business, such as for growth or expansion, there are many avenues you can explore. One of these is angel investment.
Angel investment works by giving individuals with a high net-worth the opportunity to invest in your enterprise in exchange for equity shares. Often, these investors will be experienced business professionals, which means they can add more than just capital to your business.
Having an angel investor behind your company can prove very useful, both in the insight they can offer and the sizeable funds they can inject. However, it can be hard to attract the right investor and secure their support.
In this blog, we will explain how to find the right investor to maximise the benefit for your company.
Know what you want
The first step to finding the perfect investor for your business is outlining what you want. This should align with the current, but also future, requirements of your company.
Determine how much money you would ideally receive from an investor to fit the intended purpose. If the funding is needed for growth, work out precisely what you need to fulfil your goals (such as the additional working capital needs of increased supplies, equipment, staff or anything else related to your growth plan). If the money is to fill a working capital gap within your operations, work out what sum is needed. Once you have a figure in mind, you are better placed to seek out investors who can offer you what you need.
As well as the monetary side of the investment, it is worth considering what else you would like from an angel investor. We have already mentioned that these investors usually have business experience, which can be beneficial in guiding you. However, some SME owners may prefer to have a silent partner. So, decide whether you want an investor who can give you their time and input as well as their money or one that takes more of a back-seat role.
Next, reflect on the sector your enterprise sits under and what you offer, including any that you plan to include with the right investment. If it falls within a specific niche, you may want to find an angel with expertise in the same area, which can help to narrow down your search.
Network in industry circles
Once you have identified what you need in an angel investor, it is time to head out and find one that suits your business. One way to do this is by networking.
Keep an eye out for networking events either in your local area, within the industry or online. Ensure you have membership to the leading industry bodies and organisations so that you can attend their events with similar-minded people. By attending these regularly, you can build up connections in relevant circles.
Some of these events may be attended by investors themselves, though it may be more likely that you meet other contacts who can refer you. These may even include other business owners who have had previous associations with an angel that would be suitable for your enterprise.
Remember that you are unlikely to run into an investor on your first networking event: instead, this should be a continual process. By doing so, you can make yourself and your business known, which can have countless perks over time.
Utilise platforms
While face-to-face networking is the traditional way to find an investor for your business, there are now online platforms which simplify the process.
Such platforms include the CrowdCube, Seedrs and 24 Haymarket. There are also area-specific networks, such as Newable and Cambridge Business Angels. These different platforms aim to put investors and companies in touch with one another, with a focus on allowing SMEs and entrepreneurs to reach their full potential with the right mentorship and investment.
Utilising these platforms can allow you to access vast databases of potential investors which can be refined down dependent on your enterprise’s needs and the desires of the investors. It also cuts straight to the point – of securing investment for your business – without having to spend time networking in advance.
You can also take advantage of social media platforms like LinkedIn as a networking tool. In the same way as in-person networking, you can open conversations with relevant peers here who can point you in the direction of investors. You also have the ability to connect with different people from your industry.
Pitch successfully
When you have navigated the art of finding an investor, you will need to make sure that they want to invest in your business as opposed to the many others out there. While networking can act as a warm-up in introducing yourself and your company, you will need to make a pitch to fully engage an investor and show that investing in you is a sensible choice.
It is usually up to the investor to determine the terms of the pitch, such as how long you have to pitch and the formality of the meeting. Once you know this, you should adapt your pitch accordingly. Networking can also help you to determine what the investor may be looking for, which can shape your pitch further.
Include information around your business plan, intentions for growth, target market and the financial insight behind it all. When taking the investor through this, be sure to emphasise how you can be certain that your business will succeed and the value it can offer. This should make them confident that they will get a good return on their investment, making you a better prospect.
Get funding advice
While the process of finding and pitching to an angel investor can be a long one, it is usually worth it. Investment is an excellent way of getting sizeable funding for your business which can be vital in unlocking new potential. But it is crucial to make sure any investor you choose is right for your enterprise and can provide you with the support you need.
If you need assistance in determining whether you can benefit from angel investment, we can help. We can also point you in the right direction for your investment needs and support you in putting together an appropriate proposal.
Please call the team today for a free consultation or email [email protected].