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How to Get Financing from Angel Investors

One way to finance your business is to find wealthy individuals who can provide the funding you need. Often called “angel investors” these are private investors who may also be entrepreneurs.

Guy Kawasaki writes in his book “The Art of the Start” that raising money from angel investors require s a different approach because their goals are different from those of professional investors. He gave the following advice:

• Don’t underestimate them. They may care less about financial returns than professional investors, but this doesn’t mean they are suckers.
• Understand their motivation. Where professional investors want to make money and maybe pay back society, many angel investors want to pay back society and maybe make money.
• Enable them to live vicariously. A side benefit that many angels seek is a chance to relive their youth or a romantic past.
• Make your story comprehensible to a spouse. The “investment committee” of an angel is his or her spouse.
• Be a nice person. Whereas a professional might invest in a jerk because “money is money,” an angel won’t.
• Sign up people they know or have heard of. Angel investing is often about socializing as much as profiting.

As to where to find angel investors, you can start in your community — your lawyer, accountant or even the wealthy retiree living in the McMansion next door might be interested in investing in your business. Or go to angel investors network, which I list in the article Find an Angel Investor for Your Small Business