Most of the entrepreneurs are come equipped with brand new and vibrant ideas that they want to be shaped into reality. But some factors like the required level of expertise and financial limitations are preventing them from establishing their startup. So, to start the business, they generally look for prospective investors who can invest their money in the project. This is where angel investors India come to play.
For those who are new to this, angel investors are firms and individuals having a sufficient net worth who invest money into a startup. They are very helpful for new entrepreneurs. An angel can be:
- Angel investor networks.
- Friends and family.
- Via fundraising advisers.
- Individual angel investors.
If you are looking for angel investors near me, then it will help you in choosing the best one. But there are certain things that you need to keep in mind. All the investors generally expect a decent ROI than a general investor. However, they will also provide you with more insight and guide you in establishing the business unit. Before discussing how to find the best one, let’s start with advantages and disadvantages.
Understanding The Advantages of Angel Investors
It is true that angel investors are here to provide the startups with high potential with required fuel. If you are facing issues with your limited funding, then don’t worry. These investors are there to help you out. Now, let’s have a look at some of the significant advantages of such investors.
- Funding Availability
Investing in startups involves a lot of risks. Well, all the angel investors for startups are ready to bear the risk. In fact, their only aim is to provide funds to the new business with limited funding. So, if the banks and others are not providing you the loan, then don’t worry. These investors are got your back. Just show them your business plan, impress them, and you will get the investments.
- The Maximum Level of Expertise and Contacts
The investors don’t just offer funds; they also provide the startups with adequate business expertise to start the business. They have been working in this field for years, investing in different types of companies. So, no matter what kinds of business you have, you will get assistance. Besides, they will also provide you with contacts who can help you in running your business unit smoothly. So, get in touch with the best Investors for startup business and get ready to establish your start-up.
- A Higher Level of Flexibility
Well, it is true that all the banks and other financial institutions are quite strict about the requirements that the new companies have to fulfill to get a loan. However, in the case of angel investors for startups business India, they offer the maximum level of flexibility to the start-up owners. There is no such limit on the final amount for an investor. In fact, it can go from a thousand dollars to million dollars. It is up to the investors to decide how much they want to invest.
- High Success Rate
Different studies have proved that the start-ups that received funding from the angel investors India enjoyed faster growth, higher survival rates. The reason is from the investors; they not only get funds but also receive skills and strategies to run a new business.
Well, there are some disadvantages that you should know about before approaching an angel investor. So, let’s have a look at those points.
Some Disadvantages That You Can Face With Angel Investors
- Loss of Control
Remember that when investors are investing in the business, they become a part of your business. Besides, they will control some of your business aspects. Furthermore, they can also influence the company’s strategic decisions. So, at a certain point in time, you will feel like losing control over your business. However, some angel investing platforms don’t interfere much in the business. So, you can look for such investors.
- Angel Investors’ Expectations
This is natural. If someone is taking a risk by investing in your business, he/she will expect a better ROI. However, in the case of angel investment, the investors can expect around 10 to 25 percent of profits on their investments. However, there are some investors for startup businesses who are quite flexible in this.
- Limited Funding
If your new startup unit fails to show strong profitability, the investors will not be funding your business after their initial investment. So, make sure that you are working hard to generate profits from your new business.
These are some things that you should keep in mind while thinking about angel investors. Now, let’s explore the steps for finding the right angel investors or start-up business investors for your business.
Proven Steps to Find The Right Investors for Your New Business
1. Make Sure Your Company Has the Potential
Some studies have found that only around 5 to 8 percent of new companies that go for angel investments are quite successful. This clearly shows that the competition level is quite high. As a matter of fact, startup financing involves a higher level of risk. That’s why the investors for small startups always look for someone who can offer a better return on the investment. So, make sure you have a successful business plan that can generate better profit.
2. Ready Your Business
Well, it is very rare for an angel investor to consider investing in the same startup more than once. So, you need to attract investors to invest more in your first chance. Most of the angels generally invest in startups that don’t only have ideas, but also have an excellent team and good track record. As per the experts, investors are searching for commercialization opportunities, not concept-based opportunities. So, before making the angel investors list to whom you want to approach, make sure that your business is ready.
3. Know Your Numbers
Well, you may not be a financial expert, but as the owner of the star-up, you must pose some knowledge bout accounts. So, that you can elaborate on your company’s profit margin and sales numbers effectively. The things on which you should have knowledge are income statements, expenses, profit margin, sales in the last years, balance sheet, and gross profit.
4. Seek Out for The Investors
There is a lot of angel investors across the country. The angel investors can be the groups, angel investing platforms, and individual angels. You can visit their websites and know about what they all are looking for. Besides, you should also get connected with other entrepreneurs and find out where they got the investors. Furthermore, your company’s accountant or lawyer can also help you with this. However, the best way to find such investors are taking the help of a startup investing platform.
5. Consider the Things That Angels Bring to Your Business Apart From Cash
Before approaching the angel investors, take your time and do some home works. What does that mean? Besides understanding their role, you need to consider how they can help your business using their connections and expertise. Some angels take part in the company’s activities and provide effective strategic advice to the management. For example, they can help in generating more sales. On the other side, they also help startups to attract new investors. So, make sure your investor can offer you such services.
6. Only Choose an Investor in Your Industry
It will be better for you to select an angel investor that has deep experience in the specific industry in which you want to open your startup. This way, you can get someone who will understand your business and help you to grow.
7. Start Developing Relationships
Once you have decided on whom to approach, you should now start building relationships with angels. They will become more receptive to have a conversation about the investment when you are ready.
8. Prepare an Elevator Pitch
Don’t forget to craft a compelling and brief story on your business. Besides, don’t forget to add about the issue that your product and services can eliminate. Without a good pitch, you won’t be able to impress the investors. Let them realize that you know about the industry as well as competition.
9. Remember to Prepare for Due Diligence
Most of the start-up business investors will always want to know about your company’s financial statements. Besides, they may also want to see the legal and ownership structure as well as the outstanding debt of the company. So, before attaining the meeting, acquire all the information.
Remember that working with Angel investors for startups business India can offer you all the required funds when you really need them to run your business. Besides, they will also provide advice and business plans to shape the success of the company. Even though finding a reliable investor is not an easy task, but all your efforts will pay off once you find the best on. However, don’t forget that your business must have the potential to attract investors.