“Take out the money!” The four short stories from Jerry McGuire’s ’90s rom-com capture the importance of interest to attract angel investors. Whatever you want to call it – money, capital, money, investment – the bottom line is that you need it to start a successful business. Even the best business idea in the world
“Take out the money!” The four short stories from Jerry McGuire’s ’90s rom-com capture the importance of interest to attract angel investors.
Whatever you want to call it – money, capital, money, investment – the bottom line is that you need it to start a successful business.
Even the best business idea in the world will not work if no investment is made. Research shows that bankruptcy is one of the most common reasons small businesses fail.
If you don’t have enough money to invest, you won’t be able to hire the talent you need, invest in creative marketing, commercialize your idea, or realize the potential of your product.
Venture Capital Type
Research shows that, on average, businesses with 1 to 4 employees spend $60,000 in their first year. Before we get into the details of angel investment, let’s look at a few options for investing in the start-up of a new business:
- Business Loan – Through a bank or other financial institution, small businesses can apply for a loan, which they will pay back with interest. In addition to banks, businesses like Fundera and Lendio are using emerging technologies to offer online lending markets, providing an alternative investment option to facilitate lending from small businesses to entrepreneurs. Online businesses like this have helped more than 100,000 small businesses get more than $2 billion to start and grow their businesses.
- Venture Capital (VC) Investment – Seeking funding from venture capital firms opens the way for small businesses to raise capital in exchange for equity that will not be paid. However, investors have high expectations and it is difficult for entrepreneurs to demonstrate high growth potential. To learn more about crowdfunding, you can watch Natfluence’s exclusive interview with OurCrowd CEO and founder Jonathan Medved.
- Angel Investment – Startups can hire wealthy people or groups of angels, instead of receiving money from capital companies, and can receive equity in lieu of capital, with no debt.
- Self-financing – investing in personal finance (and sometimes taking out a credit card) is how many entrepreneurs make their businesses go in the beginning.
- Friends and Family – Depending on your luck, your network of family and friends may be willing to lend or give you money to support your business over time.
- Regulated Crowdfunding – Due to new SEC regulations, companies can use approved funding portals or broker-dealers to raise capital through crowdfunding. Invest in approved and non-approved. Crowdfunding is often used to raise money for a cause or project by asking people to donate, usually in small amounts.
What Is An Angel Investor?
Angel investors go by many names – seed investor, angel investor, private investor, business angel, outside investor, etc.
Similarly, angel investors in the startup space are high-value investors who invest their own money in early stage companies, often in exchange for equity ownership. On the other hand, investors who work for financial institutions invest other people’s money in startups.
Family and friends of an entrepreneur can often act as angel investors. For example, a famous businessman and owner of the NBA’s Dallas Mavericks, Mark Cuban, borrowed $15,000 from a friend (and some of his student loan money) to buy a college house (while still in college). . Not only did he turn the bar into a successful business, but he became a technology pioneer and media investor who is now worth over $4 billion! You can also consult the experts behind popular businesses like thetradebuzz.com.
How To Find And Attract Angel Investors?
Investors do a lot of “due diligence” before opening their wallets. Researching potential angel investors is also important for early stage businesses.
As a start, you want to find a trusted angel investor who has a track record of being a well-supported company. Besides money, they should be able to provide valuable contacts and resources. You will also need someone whose interests and passions align with your business activities.
Seeking to increase the number of successful startups around the world, AngelList Venture first launched an email network in 2010, helping Uber raise its first seed funding.
With more than $1 billion in assets under management in 2018 (now more than $7 billion), AngelList simplifies the task of fundraising for small, angel-backed funds. AngelList has professional tools for startups and investors, offers more than 9,500 funds and syndicates, and accounts for more than 150 unicorns.
Gust Angel Network
Gust is called “the largest startup network in the world,” with 800,000 founders and 85,000 investment professionals around it. Gust’s SaaS platform gives entrepreneurs everything they need to start, operate and raise capital while providing investors with relationship management and marketing tools.
Gust will analyze your company and provide you with personalized insights, performance indicators and due diligence tools to give you the best chance to save your money.
Members of the Angel Investment Association (ACA)
More than 14,000 angel investors make ACA a strong driver of success for new companies seeking funding. ACA is one of the leading angel investment organizations and is the go-to place for important data and information connecting angels, entrepreneurs and the startup support community.
Discover angel investor groups and platforms for accredited investment opportunities, stay on top of laws affecting angel investment, learn more about angel investment and events, and more.
Since 2011, MicroVentures has invested in over 400 companies through Regulation D, Regulation A, and Regulation C crowdfunding. With its unique platform, accredited and non-accredited investors can invest in well-vetted startups. Companies or startups that need at least $150,000 to $1,000,000 in funding work best through the MicroVentures model.
Finally, the online equity platform enables angel investors to connect with startups to raise capital quickly.