The last few weeks have been a little frustrating for me and my team. Why? Well, we've been hard at work developing a new guide on how to raise angel financing. And some of our findings were a bit disturbing (fortunately other findings were very encouraging).
In developing the report, we took some GREAT advice that I encourage each of you to use whenever creating a new product. The advice - find out all the questions that potential customers have and make sure that your product addresses them.
So, using our online market research methodologies, we found all the questions that entrepreneurs and business owners were asking about angel financing.
- Will an angel investor invest in a ______ (insert restaurant, website, etc.)?
- Where can we find angel investors for our company?
- What is the difference between angel investors and venture capitalists?
- What return on investment do angel investors want?
- Where can I find angel investors to submit my business plan to online?
It was this last question that really bothered me...the notion that you can simple complete a form online and have angel investors (or venture capitalists) flock to your company. Our research shows that the chance of an angel investor funding your business based on an online form is about 0.01%, or 1,000 times WORSE than the odds of getting into Harvard Business School.
Sure there are many sites that tell you to pay them, submit your plan or complete their form, and that your plan will be sent to thousands of investors. And each of these sites prominently display their success stories. BUT, these success stories are the outliers. They are the 1 in 10,000 businesses that got funding for one reason or another.
The FACT is that angel investors (and venture capital firms) DON'T invest this way.
But, the good news is that tons of angel investor do invest, and in fact, they fund 15 times more companies than venture capital firms. According to the Center for Venture Research at the University of New Hampshire, last year 55,480 ventures were funded by angel investors.
And because the public stock market has being doing so poorly, more and more individuals are considering angel investing.
So the angel investors and money is out there. It's just a matter of knowing how to raise angel capital.
From our recent research and having been raising angel and venture capital for the past decade, we uncovered all the ways that you and your business CAN raise this type of capital. And it doesn't include filling out forms online.
Are you an entrepreneur looking to find angel investors to fund your company? Learn proven strategies and tactics when you download Growthink's Step-By-Step Angel Investor Guide.