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How to Find Angel Investors
In order to find angel investors, you first need to understand what angel investors look like.
The Center for Venture Research at the University of New Hampshire, which researches angel investments, has found that the average angel investor is 47 years old with an annual income of $90,000, a net worth of $750,000, is college educated, has been self employed and invests $37,000 per venture.
While the Small Business Administration and other organizations estimate the number of active angel investors in the United States to be 250,000, the number of potential angel investors is much greater. According to TNS Financial Services, there are 9.3 million households in the United States with a net worth exceeding 1 million dollars. Three million of these households, according to Merrill Lynch & Co. and Capgemini Group, have investable assets of at least $1 million, excluding their primary homes.
According to “Growthink’s Step-by-Step Guide To Raising Capital from Angel Investors,” this 9.3 million figure is the best estimate of the number of potential angel investors in the United States. The vast majority of these individuals are “latent angels,” defined as individuals who have the necessary net worth, but have not made an investment. These individuals are often the best potential investors in a venture since they have the funds, but aren’t bombarded with potential deals (unlike angel groups and venture capitalists who are constantly bombarded).
Most active angel investors are current or former entrepreneurs, successful executives, or otherwise wealthy individuals. Note that sometimes a venture capitalist will see a deal that is not a good fit for their venture capital funds but which they personally like, and thus may invest personally as an angel investor.
Because angels are often individuals with extensive business experience who have operated and owned successful businesses of their own, they can often provide more value to your business than just the money they invest.
Now that you know that angel investors are typically executives and business owners, you can find them through multiple ways, some of which are as simple as opening up your local yellow pages to find local business owners.
Growthink recently released a report - the Step-by-Step Guide to Raising Capital from Angel Investors, which explains exactly how to find angel investors and successfully raise angel funding.
Click here to learn more about this special report.