When is the best time or business stage to start looking for Angel investors?
Firstly there is no right or wrong time to approach an Angel Investor as long as you are successful in attracting the angel investment. That has to be the attitude of an entrepreneur that is serious about attracting external investment. But understand, there will specific times in your business cycle that will have the MAXIMUM chances of raising angel investment and recognising this as an entrepreneur will place you at the top of the crop of potential investments that are available to Angel Investors.
So at what stage in a business venture will you have the maximum chances of attracting business angel investment and when is the ideal time to start approaching investors?
The best time to approach an angel investor for the purposes of raising external funding is when you can clearly demonstrate that an angel investment into you will help grow your organisation or business. Sounds easy enough, BUT, angel investing due to its informality in nature can usually take up to 6-12 months from some investors and it is crucial that an entrepreneur meet private capital and private investors approximately 12 months before their business actually NEEDS the angel investment to get it at the next level.
Clarifying on this point further, let us assume that you are investor-ready now and can demonstrate that a much needed investment will help grow your business. You have demonstrated how the money you raise will be invested and have also clearly demonstrated the return on investment that an investor can expect to receive. You have a good gut feeling so it may be fair to assume that you will attract the money after a just a couple of meetings with a few angel Investors. Sadly, this will most likely not happen as receiving money from an Angel investor is generally very informal and is not like buying property where a buyer negotiates, exchanges with solicitors and then completes within 60 days.
Hence, the most successful entrepreneurs that have attracted angel investment will have started approaching investors approximately 6 – 12 months before they actually needed the money to hit their company account.
Having conversations with angel Investors earlier than when you actually need the investment will also offer you necessary pointers as to what an investor will want to see in your business before choosing to invest in you, which will then give you the crucial time needed to adapt the business to the investor's requirements.
The best Angel investors and mentors will pop in and out of your business career, offer you help and guidance, pointers in the right direction, be a voice on the end of a phone and gauge how well you are doing and the progress you are making - all in the hope of one day investing in you.
The conversations with an angel investor will usually start off with you presenting a business plan but the business may not be entirely investor-ready and an angel investor may then suggest certain measures to be implemented along with certain changes before he/she moves forward with you. Ironically, even if the investor then chooses not to invest in your business - the chances are that the changes you would have implemented would have made your business stronger, healthier, increased turnover and made you more investable.
The real knowledge, experience, guidance and investment into your business is through the conversations that you will have with business angel investors at the early stages of your business development.
If during these initial meetings you shine or demonstrate a shadow of potential these private investors will stick with you until the day comes when you need to expand, or purchase the premises or hire those extra people and because you had secured that crucial investor contact and had had the foresight to establish the relationship with the Angel investor much earlier on - the money would be available to you and only a phone call away.
This is where the benefit of using Venture Giants comes into play. Sending your investment proposal out to investors is completely free of charge, with no risk, and a one off fee of £99 is only payable after we can successfully find you an investor contact that is interested in discussing your investment proposal further with you.
From this point of view, if you are serious about growing your business, it really is good practice for entrepreneurs to write a full business plan at the beginning of the business life cycle even if you are a small sole trader and not really seeking investment. Most likely you will not get time to write the business plan after you start-up, and having a business plan ready will clearly demonstrate that you have been through that process of fund raising. So the key is that the more conversations you have with private capital earlier on, the more private investors will be in the position to assist you when you need them and these conversations with private investors will clearly indicate at what stage your business will be able to approach them in the future.
As an example to this, some entrepreneur’s trade as sole traders under their personal name yet seek to raise investment when they have not even formed a LLP or a LTD company. So an investor may have a meeting with an entrepreneur and conclude that (example) X asset must be assigned to Y company with before opening "Z ltd company".
This is not a rejection for investment but an invite to discuss the funding requirement further when your house is in order.
Ironically, I have seen this tactic backfire on Angel Investors many times on Venture Giants. After the initial meeting, an angel investor will set out a things to-do list for an entrepreneur to implement, and the entrepreneur with renewed enthusiasm will do the research and implement the recommended changes only to find that the investment of the business angel was no longer needed as the company is now far more valuable than it ever was - and all it took was a one-hour meeting and a free lunch.
So it is important to know timing wise when to start approaching and talking to Angel investors. Forming a company structure that can accommodate an investment in a business's early days is also a wise practice.
A final word to the wise, always meet with Investors as early as possible and never miss a meeting opportunity with a potential investor even if you are not seeking to raise investment at that particular time.
If you are an entrepreneur with a startup business that is looking to discuss your business idea or seed capital investment proposal with angel investors but do not know really where to start, or you own an established profitable business that is seeking business capital then Venture Giants can find you the investors that can kick-start and take your business to the next level.
We operate an online service that does all of the running around for you so you do not have to. All you have to do is use our easy to use investment template system to summarise your investment proposition and we do the rest for you.
Once we review your investment proposal free of charge, if we feel that it has potential, we approve it and send it out to hundreds of UK based Angel Investors that are specifically seeking to get actively involved with UK entrepreneurs. There are no fees to pay up to this point - and you will only have to pay a one off fee of £99 AFTER we have found you investor interest. If your investment proposal attracted a lot of interest from our database, ALL investor contacts are included in this fee with no catches.
If you already have a business plan you can use your executive summary and that is all we need (for your security we never ask for your entire business plan).
Please note, we do not approve all investment proposals and we are very selective over the investment proposals that we send out through Venture Giants because the investors that use our service quite simply demand it. If we simply send out proposals unmoderated, investors would close their accounts down with us as they rely on Venture Giants to send them credible investment proposals.
So if you are seeking business capital from real active investors, then register with us now and submit your investment proposal to us in a few simple steps.
If you are looking for business capital from Angel Investors, head to the Entrepreneur section now to find out how Venture Giants could assist you in finding the investment capital you are seeking.
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