Angel investors are one of the most reliable and effective choices for startup tech companies to generate seed funding, but before you look for investors, you need to familiarize yourself with these five principles.
One of the biggest initial challenges you’ll face as an entrepreneur is gathering enough startup funding to build your momentum and the mentors to guide you down the right path. Fortunately, a large community of angel investors is dedicated to providing both.
There are two obstacles in relying on angel investors for your funding: finding the angel investors who would be willing to invest in your enterprise, and working with them in a way that keeps them happy as they become invested in your success.
As business writer Martin Zwilling writes, finding the right angel investor is a matter of applying core professional principles to the appropriate audience—and that usually means finding specific people, not simply broadcasting to a wide audience.
I’ve taken Zwilling’s five principles and adapted them to better fit the startup tech community. Follow these principles to find the right investors and convince them to work with you:
1.      Understand that angel investors invest in people more than they invest in ideas. You need to present yourself as an expert who is fully dedicated to running a business. Don’t be afraid to sell yourself.
2.      Business plans mean everything. If you don’t have a fully written business plan, you’ll have almost no hope of getting funding. Spend ample time writing and fleshing out your business plan.
3.      Make sure you have a team in mind. If you’re in it by yourself, you won’t appear as valuable or as prepared. Prepare a team of experts you’ll be working with.
4.      Keep realistic projections. Your sales projections shouldn’t be too optimistic or too conservative—take the time to make sure your estimates are viable.
5.      Keep everything clean and transparent. Don’t try to hide anything. Express your major challenges. Acknowledge your weak points.
Angel investors won’t magically be able to take your business off the ground, but understanding how to work with them can help your business get the funding and direction it needs.
Check out the original story as well!
