Where to find an angel investor for your small business
If you have already made the decision to try and find a angel investor, then you need to be aware that you are only halfway there. Angel investors are at once difficult and easy to find. The situation is similar to searching for gold. Generally, it's difficult to find, but once you hit a vein, all your hard work pays off in a big way. Finding an angel investor can be difficult, but with some hard work and creativity it can pay off in the long run. Here is what you need to know about where to find an angel investor for your small business-
- Universities: Studies show that, angel investors tend to hover near university programs, because of the high level of new business activity they generate. Investing experts advise that if you are looking for money, you should call the nearest university, that has an entrepreneurship program, and make an appointment to speak with the person who runs it. Most often these are the people who can point you in the direction of angels
- Business incubators: It is estimated that there are approximately 1,000 business incubators in North America. At first glance, incubators appear to be only facilities that offer entrepreneurs reasonable rents, access to shared services, exposure to professional assistance and an atmosphere of entrepreneurial energy. But according to many experts, there are many business incubators that offer formal or informal access, to angel investors. A quick search online can point you in the direction of a business incubator in your area.
- Venture capital clubs: The tremendous wealth that has been created through the commercialization of technology, (as well as the strong stock market of the 1990s), have resulted in a large number of angel investors who have begun to formalize their activities into groups or clubs. These clubs will be actively looking for deals to invest in, and their members want to hear from entrepreneurs who are looking for capital.
- Angel confederacies: You may be surprised to learn that there are some angels, who are shunning the formality of a venture capital club. These investors band together in informal groups that share information and deals. Keep in mind that members of the group often invest independently or join together, to fund a company. These so-called confederacies are not easy to find, but once you locate one member, you gain access to them all. This could be a number that could top 50 investors.
Now that you know where angel investors could be, here are some ideas on how to find them-
- Call your chamber of commerce and ask if it hosts a venture capital group. There are many such groups have a chamber affiliation.
- Call a Small Business Development Center near you and ask the executive director if he or she knows of any angel investor groups.
- Ask your accountant and lawyer-There are generally people who know people with lots of money, and an interest in investing.
- Call a professional venture capitalist and ask if he or she is aware of an angel investor group.
- Contact a regional or state economic development agency and ask if anyone there knows of an angel investor group.
- Call the executive director of a trade association you belong to. You will need to ask if there are any investors who specialize in your industry.
- Ask your banker.A good small-business banker knows of such groups because companies that have received an equity investment are good candidates for a loan. While you can start at the bank your do business with, don't be afraid to branch out if the first bank if not helpful with information.