A lot of us who get into entrepreneurship don’t really think about getting into it during college. With a lot of cases including my own, the interest in starting a business and the seriousness to go through with it are responses to a build up in confidence in one’s own skills and a realization that there is a need or desire for a certain service or product. Thus we go into the field blind of information that could boost the probability of our business’ success.
From what I’ve noticed from peers, is that one huge thing that a lot forget or don’t even think of is investing. A lot of young entrepreneurs believe that it is their duty to start their campaign through their own pocket, despite the great popularity of crowdfunding sites, such as
Kickstarter and Indiegogo. In fact, there is a term we hear everywhere, yet the definition of it remains obscure to a lot of us:
angel investors.
So what are angel investors?
Angel investors are risk-taking individuals with background knowledge in some industry that fund start-ups at really early stages. They help give budding businesses the push they need to get the wheels turning. Since the startup has no history at all, angel investors go into the fray with nothing but your
idea, your promise, and your probability of success. If you watch or read Game of Thrones, these guys are basically the Iron Bank of Braavos.
What do these people look for in a pitch?
A mistake that a lot of people make when looking for initial finding, whether it be angel investors, crowfunding sites, etc., is that they pitch with only an idea. Experimentation is quite cheap these days, and with the proper search terms, you’ll find a lot of
stories of $10 experiments. Focus groups are also an inexpensive way to see if your project really is sellable. In this situation, Actions really do speak louder than words.
What can an angel investor do for my company
Remember that it is in the investor’s best interest that your project succeeds. Other than signing the obvious check, a good angel investor will devote time to understanding the needs of your business and providing solutions to those holes. This includes finding professionals in whatever you need as employees or consultants. If you need marketing, you’ll get marketing. If you need business development, you’ll get business development. This is why it’s recommended to find an investor who is readily available and has knowledge in whatever field you’re working on. They also help you transit to venture capitalists when it’s time to raise more funds.
I failed a project in the past. Is it OK to approach the same angel investor?
It depends on the reason of the failure. If it was your fault that the project failed, like you were being
stubborn or rigid, then chances are that angel investor will not want to give you their money again. However, in entrepreneurship, failure comes from everywhere. No matter how prepared and talented and prodigal you are, failure may still bite you in the butt. It’s you against the world, and a lot of times, the world wins. But investors understand this. They see it happen all the time and know that it was the business that fell and not you.
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source: Ron Conway and Mike Maples
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