8 Angel Investor Database Questions
It is normal for new businesses to seek funds that will support their practices. Thus, here are 8 most important questions that define the angel investor database. Angels are the most commonly sought after investors. They are known to support growing businesses and are preferred because they are prepared to take on more risk at the beginning of a business venture. This is something that other investors are not necessarily prepared to do. However, securing funds from the right angel investor is not something that can be done easily.
Enter the Angel Investor Database
This is the perfect handbook for any entrepreneur and angel to get ahead in the world of investment. To prosper in the business world, you need to secure an investor who understands you and will be a positive extension to your business. As an entrepreneur, you can benefit from these secret questions that define the angel investor database and the investment styles appropriate for your business.
What is the most important piece of advice that every first-time entrepreneur should know?
- Be prepared – When looking for an investor, preparation is key. Always appear prepared when talking to an investor, otherwise, they will not be able to take you seriously. Do your due diligence to find out about the industry, the niche, the products or services as well as your potential audience. If you are well prepared then you will be able to give a reasonable pitch. Never let an investor detect under-preparedness.
- Be knowledgable – It goes without saying that a great team determined your success in business. Being knowledgable does not only mean that you should understand the facets of the industry. It also involves having a team that knows what it is doing. No matter how smart you are, it is impossible to know everything under the sun. As such, you should have team members who can easily compensate for your weaknesses. They should pick up the slack whenever you find it difficult. No man is an island. According to the angel investor database, it is easy to get the job done when you have a strong force behind you.
What do angel investors really care about? What matters most to an investor before they take on an investment?
- Passion and commitment of the entrepreneur – No one can be able to sell your idea better than you. Many entrepreneurs only rely on a good idea to get them in the door. But the investor database goes to show that passion and commitment are what will back your idea well. When an angel sees how much you ‘want it’ or are dedicated to your project, they will more often than not give you the support you require. A good idea is what will get you through the door. But passion and commitment are what will seal the deal.
- Market potential – Is there potential for the product or service that you or offering? Ideally, the market should be big and lucrative. It should provide endless opportunities for massive returns.
- An incredible business plan – Every angel investor wants to come across a business plan that they can not be able to reject easily. Your ideas should be properly laid out and the right projections made. The plan should also showcase evidence of obtaining traction.
- An appropriate valuation – Evaluation is everything on investment. As an entrepreneur, you should have a good understanding of your numbers. An angel can ask for estimate for current or yearly projections. They will also ask the value of your business in the present and its value in future.
- The ability for more financing – If progress is made, the investor wants to know that there is potential for additional financing. As such, they will be confident that your business will have the support that it requires when need be.
What do angel investors need to see from an initial meeting with an entrepreneur?
Every entrepreneur needs to be prepared for their initial meeting with any investor. In fact, you should not wait for a request from the angel before providing the requisites. Show the investor that you are always prepared and a step ahead. For your initial meeting, always be ready with the following;
- An elevator pitch that has been articulated clearly. The pitch should be presented in a professional pitch deck. If you really want to stand out, you can include an executive summary to accompany the pitch.
- A working model of your product or service (prototype or similar conditions).
- Customers or early adopters who will showcase the potential of your product or service.
When should an entrepreneur expect an angel’s financing?
The angel investor database clearly states that angel financing is not something that an entrepreneur may be able to get immediately. Imagine this…you will have to find the right angel investor and present your idea. Thereafter, the angel may have to hold meetings with other angels to determine the viability of your idea. They do their due diligence then decide on their terms and conditions. After all this is done, you are notified. As such, you should not have high expectations as the process may take longer than you anticipate. Always be open-minded about this. Raising capital is a time-consuming process.
What financial questions for the entrepreneurs are listed in the angel investor database?
- How much capital are you raising?
- Granted, angel investors support startups and are willing to take on more risk. However, you need to put in a certain amount of personal capital to prove that you are serious about getting your business off the ground.
- How long will the capital last?
The sad news is that your business capital will not last forever. That is why the first amount of money that you put into a business is referred to as ‘capital’. It is only useful during the beginning stages of your business.It will deplete soon. This is why you need a steady source of income that will keep the business afloat. If your investor determines how long your initial capital may last, they can be able to easily plan ahead.
Are you back-able?
As much as you are looking for someone to help your business grow, your personal life also counts in making the decision to invest. Do not be surprised when investors ask questions about your reasons to establish your particular business and where your passion comes from. This should not catch you off guard because investors are known to be curious about your life. They do not only want to invest in an idea, they want to invest in person altogether. Angel investors are particularly interested to know how you overcame adversity at one point in your life. In the same way they can trust that you will be able to navigate any challenges that the business may bring.
What is your go-to market strategy?
Investors want to be sold on your great idea and fall in love as soon as they hear it. But there is so much to a business than an idea. This is why it is highly important for you to show how the product or service that you are offering will transition into the market. It is important to showcase how you are targeting the audience and if you have already started converting audiences, what your conversion adoption strategy is. It is best to start your business by converting the most obvious target audience then using other strategies from there.
How will the funds you need enable you to get profitability for your business in future?
If you plan to use investment money to pay your big salary or acquire a posh office with a killer view then you may just as all as kill your investment goodbye. The angel investor database goes on to clearly state that no investor is going to tolerate this. When anyone puts up their money, they want to know that it is being used appropriately. Ideally, the money should be used to acquire new customers or expand the demographics of the business. This is acceptable to all investors and business owners should be encouraged to take steps that will increase the profitability of the business.
So, why do most businesses fail? While there are reasons that can how to answer this question, the reason is not as common as you think. A business fails not because the entrepreneur had the wrong vision, wrong execution or hired the wrong people. According to the US Small Business Admission, a majority of businesses fail because they lack finances. Entrepreneurs do not know how to raise funds or draw in an angel investor because they have never done it before. Therefore it is easy for new business owners to fall flat on their faces when they are seeking investors. The best thing you can do is be prepared for whatever an investor asks. Make a point to show that they are making the right decisions on putting funds into your business. This secret guide to the angel investor database is exactly what you need to prosper. Good luck in securing that great investment that you have always wanted!