As a start-up, if you are looking for angel investors, it would help to remember the following:
Have a complete Business Plan:
Remember, you don’t need a 30-page plan. Investors do not have the time to go through such huge plans. They need all the information in a precise and concise form. It would help to consolidate your entire plan in a 10-slide PowerPoint presentation. Clearly outline the business model, how you will get your revenues and your exit plan, so that the investors will know how the business will grow and when they will get their return.
Most important – start with the problem-solution statement. The solution details can follow.
Get your numbers right:
Investors look for a plan with a clear potential to scale. That means you must be addressing a market that is atleast 10 times the revenues that you are projecting for the 5th year. Your year-on-year growth should be in double digits. Anything less would make the Angel sceptical. Keep your numbers credible and doable. Do not over project.
Angels feel more comfortable dealing with people who have good domain knowledge for the business they are planning and/or have prior experience in setting-up companies. Please do not mistake domain with solution. You will have a good knowledge of the solution but may or may not have knowledge on the business domain that your solution is addressing.
Go to a known Angel:
Angels prefer dealing with people who come through a known source. Make sure you activate your network to get connected with some Angels before you actually start looking for funding. Sending mailers to large number of Angels will not work. They will treat your mail as spam.
Look for an Angel in your city:
Angels normally like to be actively involved in the venture. So it does not make sense to work with an Angel from some other location.
Size of Funding:
Angels normally fund anywhere between Rs. 50 lakhs to a Crore. For anything bigger, you will need to look for VC funding. Angel investors also help you get VC funding when you need to get larger funding to grow the business or explore new markets. This is in their own interest.
The author, Srikanth Vasuraj, is a Business Consultant focused on helping start-ups to grow. He can be reached at +91-98454 78585 or firstname.lastname@example.org .