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What preparations need to be made when seeking angel investors?
In order to increase the probability of obtaining capital from an angel investor, a company needs to take meticulous care in creating its investor marketing materials. Even though angels do not typically abide by the same formal processes as venture capitalists, it is still important to prepare your materials in a format that can endure the same scrutiny as their corporate counterparts.
How can you ensure you get the funds you need to thrust your business to the next level? There is no simple, cookie-cutter formula. There are a lot of variables, many of which we will cover in greater detail in future articles. In the meantime, let’s focus on the essential elements of your marketing materials that must be well presented and thoroughly organized when attempting to raise capital.
A solid management team is critically important to the success of any business. Demonstrate why yours is exceptional. Angel investors want to know the qualifications of management personnel. They want to see that your team can work together effectively to make your business successful. Your team should include people with expertise in marketing and selling, accounting, managing people, and product development. Angels want to see prior track records of success. Keep this in mind when assembling your management team. Perhaps you will need to solicit help from solid business community members.
An effectively presented business plan is imperative. Your business plan should contain a marketing plan, a sales plan, solid financial projections, and a thorough description of operational control. Illustrate an exit strategy for your angel. The business plan should be compelling and attract investment. Make sure yours is polished. Don’t be afraid to show it to independent observers.
Since many companies are basing their success on proprietary intellectual property, make sure yours is protected. Show your potential investors what legal measures you have taken to secure any trademarks, copyrights, patents, and trade secrets.
Once you have organized your materials in a marketable format, you will need to develop or purchase a list of qualified angels to present your opportunity to. Source your angels carefully, and make sure those that you market to can deliver the kind of financial injection you seek. Utilize more than one source of potential funding. We all know that the “big fish” can and will get away.
Bear in mind that this process may take some time. Be patient. Be ready to present your ideas and concepts at a moment's notice. Be prepared and organized, and continue to persevere!
Craig Rosenbaum has been involved in direct marketing and mailing list management since 1995. His experience with Wallace Direct, the nation's premier source for Angel Investors and Real Estate Investment Sales leads, has placed him in the unique position of communicating with Angels and those seeking venture capital.
