Angel Investors are generally wealthy individuals who invest at an early stage in the creation of a new company, usually in exchange for equity. In this article you can read more about angel Investors, what exactly do they do? And what are the pros and cons of an angel investment?
Who are Angel Investors?
To be an angel investor, you don't necessarily have to be an accredited investor. Incidentally, many angel investors are accredited investors.
How are angel investors different from VCs?
Angel investors are wealthy people (or groups of wealthy people) who invest their own money in companies. Venture Capitalists (VCs) are employees of venture capital companies who invest the money of others in companies.
How do angel investors work?
Angel investors invest their own money so that they have different sources of income.
They generally invest in companies in sectors they know a lot about.
Suppose an angel investor previously made money in the software sector, you can imagine that he now also invests his money in the software sector.
A major advantage of working with angel investors is the fact that they are often more willing to take a greater risk than traditional financing institutions, such as banks.
angel investors are usually experienced business people with a number of years of work experience and knowledge.
Angel investors generally report early in the life cycle of a starting company. One of the reasons why they are called angels is the fact that they are willing to put money into starting businesses that may find it difficult to find financing.
Angel investors are often primarily interested in the founder. Who is behind the company?
Of course that does not mean that angel investors only look at the founder. They naturally also look at factors such as the size of the market, the service or the product itself and the competition.
As a founder, it is your most important task to convince the angel investor that you are the person who will take this startup to the next level.
Tip: lees ons artikel over de geheimen van Beursgenoteerde Miljardenbedrijven!
How do you proceed in finding an angel investor?
The very first thing you focus on is your pitch deck. Contrary to what many think, this is not a sales pitch, but a short, well-detailed explanation of the problem that you solve with your startup. That's it.
When approaching potential angel investors, you ensure that they get to know more about you. Most angel investors will ask for a pitch deck. Again, a short well-detailed explanation of the problem that you solve with your startup. So do not send an excessive amount of information, it is highly likely that your potential investor is not only concerned with your startup ...
Suppose an angel investor asks for a more detailed summary, you can send the summary of your business plan. Here your potential investor will find things like your problem solution, market size, competition, management team and financial picture.
If you have made an angel investor enthusiastic with your pitch deck or summary, it will come to a meeting, a pitch meeting!
Tip: take the time to build up a good relationship during the pitch meeting.
Angel investors prefer to invest in an entrepreneur they like rather than an idea they like.
Another tip: be yourself. Represent your passion for the startup. In general, that is all you need to convince an angel investor to close a deal.
Don't be scared! Are you ready?
At Holland Startup, first-time entrepreneurs fulfill their entrepreneurial ambitions. We guide, coach and finance young entrepreneurs to turn ideas into successful startups.
We enable young entrepreneurs to shape our society! Are you in?