Finding a business angel can be a good alternative to finance the startup. Indeed, at the beginning, banks do not lend and venture capital funds do not invest. Simply because the startup does not have yet metrics that prove the traction of the project. Therefore, finding a business angel to finance the startup is a possible solution for entrepreneurs.
In general, few business angels publicly display their status. However, there are some reputable investors who communicate publicly about their investment strategy. The best way to find a business angel is through your own network or a fundraiser. Fundraisers often have lists of potential investors. Many business angels also form informal or organized networks of investors (for example those referenced by France Angels).
Advimotion is a financial consulting firm that assists startups and SMEs in obtaining non-dilutive financing and equity fundraising. We also act as advisors in business sales transactions to best represent the interests of sellers.
We offer strategic consulting and outsourced CFO services to ensure the financial and operational monitoring of your business. Finally, we take care of the drafting of investor documentation : business plan, pitch deck, creation of reporting files and valuation calculations.
For more information, please contact us.
Is it difficult to find a business angel ?
The good news is that finding a business angel is simple. But before giving you the different leads and solutions, let’s agree on one thing. Is your project innovative (technological, service innovation…) ? Does your project have a real growth potential and is the market in which your startup is located big enough? (A big enough market is valued in the millions of euros and beyond). I ask you this because it is the first question that the business angels you will contact will ask. So, before you even think about contacting a business angel, think about your market, do your research and once you are sure you are a startup with growth potential, you can approach business angels without fear of being turned down wherever you present yourself.
Ask around to find a business angel
Now that you are sure of your startup’s innovation potential, start thinking in terms of your circle of acquaintances. First, ask yourself if anyone in your close circle knows of a business angel to whom they could introduce you. Indeed, you may come across business angels without knowing that they are business angels because a business angel can be a working company executive, a serial entrepreneur, a former company director. Thanks to their experiences, these people have accumulated a certain amount of capital that they wish to invest. So do your first research within your close circle and the people they know. An approach within these first circles still requires preparation. The business plan, the pitch deck and a predetermined valuation are important elements.
Business angel networks
Another possibility to find a business angel is to contact business angels networks that connect investors and entrepreneurs. In France, for example, we have : France angels, Euroquity, Women business angels etc… Thus, you have many networks that will facilitate the search and the connection with the business angels who will best suit the vision and values of your startup. However, some business angels networks have strict investment criteria, similar to those of venture capital funds.
Apply all these guidelines and you will find a business angel. Above all, do not get discouraged during the search. Indeed, you will spend time persuading, convincing and negotiating but think about the funds you will be able to release for the successful launch of your startup.
Social networks to find a business angel
You don’t just have to stick to investor-specific platforms to find business angels. Social networks can be a great place to connect with your next investor. Twitter in particular has become a tool for connecting startup founders with business angels.
Know who you’re looking for
By keeping this “typical” business angel profile in mind, you will drastically increase your chances of meeting the business angel you need :
- Has an income of over €100,000. However, there are more and more young business angels who invest out of a passion for entrepreneurship even if they have no income or significant savings.
- Has one or more successful entrepreneurial expériences
- Expects to hold the investment for at least 5 years (although some business angels want to sell their investment after only a few years)
- Enjoys a strategic advisory role to the entrepreneur
Is familiar with the sector in which you operate
Business angels look for companies with growth and export potential. They understand that it may take several years for their investment to pay off, although they also expect to be well compensated for their risk. Furthermore, a business angel who is happy with his investment will act as an ambassador. He will talk to his network about your products and may even encourage other relatives to invest alongside him. Investing together is reassuring!
If you need support to prepare the financial documents that will allow you to get in touch with business angels and maximize your chances of convincing them, don’t hesitate to contact Advimotion.
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