As the Bank’s purse strings look set to remain tightly closed for business loans, many small businesses are left struggling to find the funding they so desperately need to expand and grow their business.
So what is the answer? Many businesses have turned to angel finance and found it ready, willing and able to help them.
I am passionate that every business looking to grow, in any part of the world, should have the opportunity to access funding and am regularly asked how to win angel finance for a business, so here are my top 10 tips:
All financial information needs to be expertly produced, easily understood, realistic and justifiable. Mistakes here will cause a loss of credibility and interest so you must know your figures inside and out. Investors are looking to see a return on their investment, and need to be sure that you have a cast iron grip on the finances of the business and know exactly how you are going to turn their funding into profits.
Those offering angel finance aren’t just investing in your business; they are also investing in you. You need to be passionate and likeable, as well as precise and persuasive. This is your opportunity to sell yourself and build up a rapport with the Angels.
How passionate are you about your business? Make your zeal for your venture irresistibly contagious and you’ll stand a far better chance of winning over your business angel audience. If you believe in your product or service, are committed to its success and convey this in your pitch, you are one step closer to funding.
The relevance of your background will play its part in determining whether a business angel decides to invest in your venture. What skills do you have? Where did you previously work? Have you ever run a business before? Investors will want to know whether you have the ability to launch, develop and grow a business.
Research, research, research
Find out all there is to know about your customers, competition and the potential of the business. You need to become an undisputed expert, and to be able to convey this knowledge to those around you.
Are there other firms developing the same idea? How flooded is the market currently? Angels are interested in protecting their investments so you should aim to prove that your business model is strong enough to fend off competition and that you have the relevant patents or legal protections to ensure that you will have no direct competitors.
A pitch must convey the uniqueness of the opportunity you are offering the Angels in front of you. By the end of your pitch, you must have convinced them that there is something special about your business, something that differentiates it, if only marginally, from what exists in the market today.
A full and complete understanding of your business, its market, finances and strategy are essential as Angels will expect those presenting to them to be able to answer any question thrown at them.
Talk to people in the know
Getting as much impartial advice about your business or start up idea as possible can be invaluable when looking to start or expand your business. Angels Den provides free Business Funding Clinics which are a great opportunity for you to get free advice on your business and ask any questions you may have about the funding process.
What sacrifices have you made for your business? How much time and effort have you committed to your venture? How much have you personally invested in getting the business to where it is today? Business angels are looking for individuals who are 100% committed to their business, so present your sacrifices with pride and you’ll be sure to gain their respect.