Shopping for Angels
Angel Investing can be a pretty confusing business. To get a little advice on shopping for angels, Kipp caught up with Carl Simmons, co-author of ‘Every Business needs an Angel.’
November 28, 2010 3:45 by Eva Fernandes
Angel Investors: Kipp tried, really tried, not to begin this article with some kind of angel-pun. In the end the only reason we didn’t was because we just couldn’t decide on one. From riding “on the wings of an angel” or business “in the arms of an angel” to “having an angel on your shoulder” and Dubai being a “city of angels,” there really are just too many angel clichés in the book. So we’ll just get right to the meat of the article.
Angel Investors are a relatively new kind of investor that emerged in the early 1990s. According to Investopedia, an angel investor is “An investor who provides financial backing for small startups or entrepreneurs… Angel investors give more favorable terms than other lenders, as they are usually investing in the person rather than the viability of the business. They are focused on helping the business succeed, rather than reaping a huge profit from their investment. Angel investors are essentially the exact opposite of a venture capitalist.”
After Kipp went to the recently held Celebration of Entrepreneurship we jotted down some of the best tips Carl Simmons, a serial investor, Chairman and CEO of Travel Influential, USA and co-author of Every Business Needs an Angel: Getting the Money You Need to Make Your Business Grow, had for a business start-up looking for angels.
Here they are:
Looking for an angel: When you are looking out for an angel investor, first start with the professional community: Approach lawyers and investment bankers. Chances are the people you approach may not be interested, but are more likely to know of fellow professionals within their circle of influence who are looking to invest. You can try soliciting the advice of a consultancy like Envestors, but the best source for finding an angel is other local entrepreneurs. Fellow entrepreneurs have gone through the process and they know the market—it is very likely they have met with a series of angel investors who weren’t particularly interested in their idea, but may be interested in investing in yours.
Developing your pitch: Develop a short, clear and understandable pitch for when you meet with your angel investor. Keep it as simple and as direct as possible. Though it is a good idea for you to develop a thorough and comprehensive business plan exceeding 30-40 pages for your benefit, your angel investor is likely to want to a more concise version of the plan during your first meeting.