Angel Investors [ AI] and Venture Capitalists [VC] Looking for VC or Investors to Fund Your Start-Up Projects ?
You Must be having following Questions in Mind ?
-How do I find Investors for my Startup?-
-What do you look for in a Startup before Investing?
-Do Angel Investors Fund looking at MVP?
-What Investors are looking for?
-I am looking for Investors to Fund a Project. Where should I look for Investors?
-What do Angel Investors look for in Start-ups?
-Why do Investors Fund nonprofits?
-What's the difference between a VC and an Angel Investor?
-How do Start ups access Angel Investors?
-Do Investors Fund Concepts?
Angel Investors [ AI] and Venture Capitalists [VC] :
Angel Investors [ AI] and Venture Capitalists [VC] are often interested in the same Projected success of the company, but there are some differences between the two.
Here are the basic definitions of each Term:
Angel Investor: An Angel Investor an individual with a Net of $1 million or more (excluding their personal residence), or who has an income of $200,000 per year (or $300,000 for a married couple). They differ from close friends or family
Investors as these individuals don’t have a personal connection and choosing to Invest in YOUR COMPANY rather than YOU.
Venture Capitalist: A venture capitalist is usually formed through Limited Partnerships where limited partners Invest in the venture capital Fund. The Fund manager then Invests in the best deals which will lead to the highest return for
the limited partners.
Other notable differences:
Angel Investors generally Invest lower amounts rAnging from $25K-$100K in a Business while the average Venture Capitalist Invests about $7 million.
Angel Investors are more likely to Invest in the earlier stage of development Venture capitalists will generally spend more time researching Investment prospects Angel Investors typically don’t consult anybody for decision-making while a venture capitalist will rely on a committee to help navigate decisions Are you trying to attract Investors to your Business? If so, you’ll definitely want to be sure that the framework of your Business is sturdy and you have organized your goals and expectations. Obtaining Funding requires a certain level of organization in order to reach the best Investors (no matter which type you choose to go with!).
One of the most important things when raising capital is figuring out how to gain access to the prospects that may be a good fit for your round of financing.
When raising capital you need to know that many ingredients determine wether that Investor may or may not pull the trigger on an Investment in your company.
These ingredients include:
The size of your round
The industry in which you are executing with your Business
The location of your company
With the above points in mind, I have created a list of resources that will help you in understanding where and how to fish for these leads.
CrunchBase is a platform where you can find information from all the players in the Startup scene. You can search by company or by Investors. While I find it is a great tool, it is also an open source which means that its information may not be 100% trusted.
In any case, I find their feature announcing the most recent rounds of financing interesting. You should search for the companies operating in your space that have closed a round of financing in the past 6 months. Go into their profiles and
see who are the Investors that have participated. Since these Investors are active in your vertical you should absolutely reach out. You can also subscribe to CrunchBase and you will be receiving this information in your inbox.
Another option is to look for your direct competitor on the search of CrunchBase.
Inside the page you will find similar companies. Go inside each one of their profiles and gather the Investor leads that you‘d like to reach out to. Perhaps at this point you will already have an Excel sheet to keep track of your prospects.
Mattermark is the paid version of Crunchbase, but given the price of its product ($6,000 per year) it is for the most part used by Investors. Its direct competitor is CB Insights and both platforms are great. CB Insights is very useful when reading industry reports. I have used them both.
On Mattermark I really like their trial period. It gives you the opportunity to use it freely without incurring the fee for a specific period of time. Note there will be limited access when it comes down to the usage of its features while using the trial option.
In order to find your prospects, you should go into the advance search and filter by location, stage, and industry. It will display the results of companies that are similar to yours and it even displays what Mattermark calls the growth score. This score ranks companies by momentum/traction.
Once you have run a search, go into the profiles of the companies and Start gathering the name of Investors that participated in their rounds. Just as I mentioned on CrunchBase, grab those leads and place them into the Excel sheet so that you can reach out later.
1000 Angels is a Private Investor Network where early stage Startups connect with high profile Investors. The platform really goes the extra mile with vetting the Investment opportunities that are placed. However, it is completely free for Startups which is the great thing about it.
Once you are live on the platform you get to interact online with Investors. You can also interact with Investors during offline events that 1000 Angels organizes with the Startups and Investors of its community.
Since the platform accepts less than 1%, in the event you don‘t make the cut you can always either apply to one of the multiple crowdFunding platforms or list yourself on AngelList.
LinkedIn is the biggest social Network for professionals. Every major Investor and all the senior executives that you can think of have their own profile on the site.If you do not have a premium profile I would definitely encourage you to get one.
The cost is around $100 per month but it is really useful for founders that are in Fundraising mode.
The way you want to use LinkedIn is to help you in finding the targets that would make sense for you to connect with. The advance search is your best friend for this. What you should do is type in keywords that may apply to your Business like “Angel Investor“, “food Investor“, etc. Once you have gather those results and know who you want to target you can either message them directly via the internal communication messaging system of LinkedIn or figure out what is their email.
My recommendation is that once you have the leads see who else you have in common and ask these mutual connections that know your prospect to make an
introduction. Remember that warm introductions are the best way to go as they serve as social proof. The stronger the introduction from someone close to the prospect the better. From my perspective, the best introductions typically come
from founders that have made great returns in the past for that Investor.
There are multiple conferences out there where you can get up on stage and pitch Investors. I would advise you to stay as far away as possible from conferences where you have to pay to pitch.
Arguably in my mind, some of the best conferences include TechCrunch Disrupt, Money2020 (if you are in the financial services space), Le Web, or any of the conferences organized by Web Summit. Even if you are not selected to pitch on stage you can also benefit from scheduling meetings with the attendees of these conferences.
To make the best out of conferences make sure that you get ahold of the guest list of people attending. Find the Investors that would be interested in your venture and Start sending them emails to schedule a meeting at least 2 weeks prior to the conference date.
For approaching the Investors, one should look upon the following points-
Self Confidence- This is one of the chief aspect for approaching the Investor, a self confident person will be able to convince the Investor and make him believe in the product and that his Investment would be fruitful and not go in vain.
Public Relations- The person pitching in front of the Investors should be proficient enough in terms of public relations and public speaking to maintain better interaction with the Investor.
Business Plan- Writing a Business Plan is easy but writing one with sufficient details for Investors can be tricky. So, before approaching the Investor, a proper detailed Business Plan should be fabricated.
Investor Wish-list- A list of ideal Investors should be formulated but choosing them should be done carefully. Accepting financing means taking on a new relationship, which is likely to continue for a long time. For example, if a list of six investors is devised, eventually the six will narrow to one or two relationships where the timing, the style and strategy and the gut feeling seems right on both sides.
Team- Investors want to have a gut feeling that they can trust you and your team.
They'll want to know that you and your co-founders or management team can execute the ambitious Business Plan you’ve presented and pay back your loan or generate a return for Investors. For this, it is vital to line up your Team Accordingly.
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Angel Investors [ AI] and Venture Capitalists [VC] :
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