Angel investors can be individual private citizens or groups of entities like a corporation or a limited liability company (LLC). Investors can be male or female, wealthy or middle class, and come from all walks of life. Angel investors are in search of start-up companies, products, services, or industries. One of the most effective ways of finding investors is by using an Angel Investors List.
An Angel Investor List is basically a compilation of people and institutions who have expressed an interest in making investments in your venture. This information is used by venture capital and private equity firms to locate potential joint venture partners or venture capital firms with complementary interests. The main objective is to increase the value of the partners' portfolio by putting together complementary investments. By providing potential joint venture partners and investment firms with information on other possible investors, you will be able to attract more venture capital investments.
To find angel investors, search on the internet using the terms "angel investor", "venture capital", "private placements" and "private placement". There are dozens of online sites that provide information on investment companies, venture capitalists, and angel investors. Some sites allow you to search using keywords. Once you have decided on a few prospecting companies, read all information provided carefully, particularly about the management team and the investment philosophies of the firm. Be sure to investigate what the angels or venture capitalists own stake in the business before deciding how to invest.
If you are not yet comfortable with approaching an angel investor, then consider starting a business of your own - a boutique business focused on a specific niche. You can then register it on a website for easy future access. This will help you create a business plan and gain financial footing. In time, you can seek referrals from other startups that are in the same or related industries. As your business becomes established, you can continue to solicit investment from angel investors, which will accelerate growth and profits.
Most venture capital firms work with a limited network of angel investors, as most investors prefer to invest in smaller, startup ventures rather than bigger companies. Therefore, it may take more work to find good angel investors and secure a seat at their table. However, you should not lose hope because there are other avenues you can pursue. In particular, you can contact existing investors and ask them if they are interested in acquiring a stake in your startup. Most venture capital firms have programs that allow startups to solicit investment from existing investors and vice versa.
Before investing in a startup, you should talk to your attorney, business adviser, or accountant. These professionals can give you an informed perspective on the pros and cons of investing in startups. Additionally, you should consider whether your investment is tax-deductible. By following this advice, you can make sure that you are spending your money wisely and you are investing in startups that will be around for many years to come.