As an entrepreneur, you must be looking for sources to fund your business. With the initial investment as funds from family and friends, you got your idea buzzing but the question is, “What next?” You would surely need further investment into your startup to take it forward. Whether it be to scale business operations, to hire additional human capital, or for any other reason, money is needed. However, the chances of getting a bank loan without adequate collateral as security is minimal.
Then, what do you do to take your business to the next level?
Here, angel investor comes in. These investors are referred to as ‘angels’ for a reason. The amount that they invest into your business is not in the form of debt and doesn't require repayment, neither in the form of installments, nor in the event of business failure. However, there is one significant drawback, in essence, loss of control over the business due to dilution of ownership.
Regardless of the drawback, angel investment is one of the most viable options to seek funds for your startup, and in this article, we will discuss how to approach an angel investor in India.
An angel investor is a person with a high net worth and can come from any background. They may be a lawyer, a doctor, or an entrepreneur them self. Unlike venture capitalists, the main aim of an angel investor is to facilitate a startup’s growth through proper guidance. They are not profit-oriented, rather, they are growth-oriented. They act as mentors to the business and thus help it grow.
Now that you know who an angel investor is and how they help a startup flourish, you must be curious about how one should approach them. One can follow four simple steps to gain potential investment from angel investor. These steps have been elaborated on below.
Step 1 - Prepare your Pitch Deck
A Pitch Deck is a simple yet critical presentation that enables startups to gain investment. It explains the idea, business model, market, and other relevant characteristics in order to invoke investment.
It is a vital part of the startup process and requires attention to detail. Easy To Pitch is a firm that helps startups by creating attractive and persuasive pitch decks, facilitating optimum investment. We focus on the key pointers and the identity of the startup to hook in investors. So, the creation of a fascinating pitch deck is essential.
Step 2 - Have your Prototype
Once you have your pitch deck ready, you need to have a sample product available. A practical demonstration of your idea helps investors visualize and understand it better, arousing their interest.
The main idea here is to show investors that your idea doesn’t just comprise numbers but is a tangible creation. Thus, having a prototype helps immensely.
Step 3 - Find an Angel Investor
There are plenty of affluent investors in India and you can easily find them through platforms like Twitter and LinkedIn. Before approaching anyone, you need to study their background, interests, and industry. You can’t expect someone with experience in pharmaceuticals to invest in your ed-tech startup.
Send your chosen angel investor a direct message with a powerful pitch. The pitch should be concise, yet impact full. So, you would need practice to present.
Step 4 - Present Powerfully
Here, confidence is key. Once you have an investor intrigued, prepare to present your idea, business model, and prototype while exuberanting maximum confidence.
Easy To Pitch can help you here. We provide founder grooming exercises in order to get founders in the right mindset and build great amounts of confidence to perform an impact full pitch.
By following the above steps, you can source optimal amounts of investment from angel investor and take your startup to new heights.
Written by: Sawan Oberai