Many of the startups we know and love can attribute part of their success to the input of angel investors.
Unlike traditional investors, angel investors tend to provide a more informal and flexible form of funding for emerging companies. This makes them ideal for brand new businesses that have endless ideas but lack the resources to make those dreams a reality.
In this article, we’ll explain more about what angel investors do, and explore some of the ways in which businesses can establish partnerships with these investors.
What is an Angel Investor?
An angel investor is a high net-worth individual who is in the position to invest in companies they can see a future.
The agreement between angel investors and the businesses they invest in varies from company to company, but investors will typically ask for a percentage stake in a business (usually somewhere between 20-25%) in exchange for a pre-agreed initial investment.
Once an agreement has been reached, contracts are drawn up between the angel investor and the business in question. This ensures that everyone fulfils their legal obligations in the partnership.
Provide the Right Pitch
Catching the eye of an angel investor can make a huge difference to any growing business. Almost all emerging brands would benefit from an injection of cash to explore growth opportunities, and many are actively searching for investors to allow them to do just that.
Angel investors are also on the search for the next big thing because if they choose to invest wisely they too will benefit enormously. Investors will often invite businesses to pitch their ideas – and these invitations can be the making of lucrative partnerships. But knowing how to provide the right pitch is crucial.
When pitching to angel investors, businesses need to convey their passion for their idea, and clearly explain what makes their company unique. Pitches must be crystal clear about the purpose behind the business, showing how it solves a problem consumers are experiencing.
For a pitch to be successful, it needs to engage and excite potential angel investors. Investors should instantly understand the opportunity and want to get on board with the business.
Investors will ideally be intrigued and left wanting to know more about the company being pitched. Ultimately, if the pitch is successful, they’ll want to invest to ensure their involvement in the company’s growth going forward.
Look for Network Opportunities
Network opportunities are everywhere. And if you’re looking for angel investors, it’s worth exploring them all.
One of the fastest and simplest ways of finding angel investors is online, through digital investor networks. Register your business with some of the top angel investment networks and create a compelling profile that will pique the interest of relevant investors. Then it’s just a case of starting a conversation and arranging a meeting to make that all-important pitch.
Networking events provide more traditional opportunities to connect with investors in your industry, but these too can be invaluable. Look out for industry events well-attended by investors and ensure that your business always has a representative on these occasions.
Watch for opportunities to speak at conferences and training events for fellow industry professionals. You never know who might be in the audience (and on the lookout for their next investment opportunity!).
Find Connection Services
Making connections between angel investors and businesses isn’t always the simplest task, but there are platforms out there created with one goal in mind: to make those connections easier.
If you want to connect with angel investors, explore platforms like the Angel Capital Association, the Angel Investment Network or AngelList. Each of these has been designed to connect investors with new business opportunities. They’re perfect for emerging startups and established investors alike.
The UK Angel Investment Network brings investors and businesses together via an intuitive, user-friendly platform. It’s perfect for businesses looking for investment and UK angel investors with the capital, contacts and knowledge to help them succeed.
Companies can also find angel investors through the Angel Capital Association. This platform is home to over 15,000 angel investors and over 30,000 entrepreneurial companies. It’s well suited to businesses just starting their search for an angel investor. The ACA has already paired huge numbers of emerging businesses with the investors they need to succeed.
AngelList is another great option for startups on the hunt for investment. The site provides invaluable networking opportunities for investors, job seekers, venture capitalists and startups. The platform accelerates innovation by equipping startups, investors and fund managers with the tools they need to disrupt the status quo.
Get Advice on Angel Investors
If you’d like to learn more about angel investors and how investment could ensure the sustainable growth of your business, we’re here to help.
Get in touch with our team to learn all about the magic of angel investors and we’ll be able to take you through some further guidance on how angel investor partnerships work.