All about Angel Investment
We see every week many startups, raising millions and billions of dollars of funding. After listening to this news, you might feel raising funding is easy. But is it really?
If you have tried raising it, you would be aware of, how difficult it is.
So, let’s understand how a startup can raise funding, what factors are considered by “Angel Investor” while investing and what should you keep in mind before approaching any investor?
Who are Angel Investors?
Angel Investors are Hight Net-worth Individuals, who invest in early-stage startups.
They are mostly Senior Executives of companies like Managing Directors, Vice Presidents, etc., Founders of successful Startups, who have got a good exit from their startup.
Usually, these Angel Investors invest in startups of specific industries because they have worked in that particular sector, either as a startup founder or as a senior executive of companies.
Because these investors have a good knowledge of that industry, they advise them, mentor them, and because of a good network, they can help startups to raise further funding.
Normally an Angel Investor invests around $25000-$1Million, and the investment made by them is called an Angel Investment.
When should you Go for Angel Investment?
The first question before approaching any Investor, you should ask, do you really need an investment or can you carry out your startup without any investment?
If you feel, you need investment to grow only then you should go for it.
But before that, you should consider the following points:
No one will get ready to invest in Idea only, you must have already got some success, either positive customer feedback, increase in revenue, or increased demand.
Good Future Plan:
You must have a feasible plan and a clear pitch deck so that you can convince that investor. It includes who are your competitors, what is your USP, SWOT analysis, your vision, and mission, etc.
Clear Data and deep Market Research:
You must have an excellent knowledge of that industry and the calculations should be very clear because Investors do not like round figures or fake estimations.
What kind of improvement you will make after getting funding and how you would utilize that money, should be planned.
What does an Angel Investor Look for in a Startup?
Except all the points mentioned above an angel investor consider the following points which you should take care of:
An investor looks for the vision of an organization, that is why you must be very clear about it. What do you want to do, why are you doing it, what are the principles and beliefs of the organization?
Your team can be lean, but it should be the best. In the beginning, you cannot hire a big team, but you must have talented people within. They should be specialists in their work.
Traction and Scalability is a very important factor which is considered by Investors because, in the end, they need a good return on their investment. That is why you must have convincing statistics.
How Big your Market Size:
The quality of your product matters but the market size is also considered. If your market size is very small, then it will be difficult to grow and if the market size is too big there will be very high competition.
Thus it should neither be too big nor too small.
Reasonable Valuation of the Company:
An investor only invests if the valuation is reasonable but the mistake committed by founders is, they overvalue their venture in the beginning. You should value it based on practical factors like team experience, current position, and future scope.
In the end, Angel investors want a good exit so that they can get a good return on their investment. Thus, you must have an ‘Exit Plan’ ready for them. You should clearly explain to them what future ‘Mergers and Acquisitions’ you can do and how they can get a good exit.
How Can You Contact Angel Investor?
This is the most frequently asked question that how to contact Angel Investor? So here you will get few ways through which you can approach the right investors for your startups:
- Linkedin: This is a very useful platform where you can directly contact investors for funding because almost all the Founders, CEOs, and Investors are on Linkedin. so if you don’t use it, this is the time to create a profile and make it authentic, network with the right people, post some good stuff and then try to approach the right investors for your startups.
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- Twitter: Twitter can also be proved useful if you are looking for an Angel Investor.
- Mail: If you can get their Mail Id then it would be easy to directly contact them and pitch your idea.
- Reference: It is difficult to directly contact these high net-worth individuals, so if you get a reference, it becomes easy to pitch your idea and it creates a positive impression as well.
If you are seeking funding then find a friend who can refer you.
- Angel Network: Nowadays different platforms are also available that bridge the gap between Startup Founders and Angel Investors.
Some of them are as follows:
Some Famous Angel Investor
There are so many ‘Angel Investor’ who can help your early-stage startup and the name of some famous investors are:
- Ranjan Anand: He was the MD of Google, South-East Asia. His popular investments are in Unacademy, Instamojo, Travel Khana, Easy Gov, Mobile Wala, etc.
- Ritesh Malik: He started Innov8 coworking space, which has been acquired by OYO. He is a doctor turned entrepreneur and has made several successful investments, such as investments in Techno Labs, Asimov Robotics, Fins Robotics, Josh Talks, etc.
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- Kunal Bahl: He is the CEO of Snapdeal, He has also invested in various successful startups such as OLA cabs, Rapido, Unicommerce, Jugnoo, Bevkuf.com. He usually invests in E-commerce and Artificial Intelligent based startups.
- Kris Gopal Krishnan: He is the co-founder of Infosys. He has also invested in different startups like First Cry, Lookup, Hunger Box, Acko insurance, etc. Usually, he invests in IT and Tech startups.
These are only a few Angel Investors, there are many more who can help in your startup growth.
But before approaching any Angel Investor you should properly examine their previous startups, how they are performing, and the sector they invest in, because ultimately you not only need money, but you will also require their mentorship and guidance.
It is not only investors who choose Startups, but as a founder, you should also make a good choice when it comes to selecting investors. A good investor can increase the chances of your success.