I know a lot of business owners, and their businesses are very diverse. Some are profitable, some aren't. Some involve single, store-based locations, while others are Internet-based or even spread across an international network. Some have large staffs, others only have a few people. Some specialize in technology, some in produce, some in commerce.
The variations are endless, but all these companies share one thing. They all required a lot of money to get started and/or grow.
When raising funding, you always have several options - from securing a loan from a bank, receiving a secured line of credit, crowdfunding, or seeking investors. When looking for investors, most people think of venture capitalists, firms who manage pools of money and invest it in startup projects.
Angel Investors are a Realistic Option
Another option for the shrewd businessman or businesswoman, though, is to find angel investors. Angel investors are individuals who invest their own money in a company or business, usually in exchange for equity ownership.
The angels will then wait for your company to grow (and usually sell to a larger company), at which time they will sell their shares for a big gain.
Sometimes, angels will band together into angel funding groups which pool their capital in order to invest in larger projects and to diversify their risk of investing in just one company.
So, where can you find these angel investors and let them know about your company? There are a few options.
Your Current Customers
If you already have a small business and are looking for angel investors to help it expand, you may be able to find angels among your current customers - someone who knows and trusts you already, who has already experienced the value of your product or service, and who could more easily envision how successful your company could become.
Internet Search for Angels
One of my favorite types of angel investors are retired industry executives. For example, if you are in the aerospace industry do a Google search on "retired Boeing executive." You will find numerous former Boeing executives from this search. Then you can start contacting them via phone or email. These former executives generally will have the money to fund you and the connections to help you grow your business faster.
Local Entrepreneurial Groups
I have met several angels myself by attending local entrepreneurial groups. Do an internet search for "your city/state" plus "business networking group" or "entrepreneurs" group, club, or forum. They're pretty much everywhere and all have different names, but check around.
Depending on the size and legitimacy of the group, you can find some very experienced businesspeople - who are good to know for many reasons, such as mentoring or connections or funding.
Importantly, most potential angel investors don't refer to themselves as such, but if they have funds available and would be interested, then don't be afraid to bring up the opportunity to fund your business once you've established a relationship with them.
Friends of Friends
It's also true that the more business contacts you know, the more your odds of finding an angel will increase just by calling them all and asking if they know anyone who might be interested in your opportunity.
Ask Your Accountant
Banks and personal accountants often have contacts, as well. If you're unable or unwilling to find angels through other means, you can check in with your bank or with your accountant.
They may know some angel investors personally and be willing to recommend one to you.
Angels are Individuals
Remember, angel investors are not venture capitalists. Rather, they're spending their own money on things in which they believe.
This means that your odds of convincing them will go up if you can sense their other motivations besides pure growth potential and profitability, such as the social/ethical value of your company or falling in love with you or your product.
Angels invest for all kinds of reasons. Find theirs out and use it to your advantage.
Come up with a good pitch and business plan with evidence that you have a great opportunity to succeed, and you'll go far every time.
Suggested Resource: In our Angel Funding Formula program, you'll learn exactly how to find and contact angel investors, exactly what information to convey to them and how, and how to secure your financing check. This presentation explains more.