Do You Believe in Angels?
Getting angel capital for your business was never all that easy. But today, post-dotcom-crash, is there any angel money to be had? In expert circles, opinions differ a bit.
"If you were to characterize early-stage [angel] investing as an intersection, there isn't a red stop light--there's a blinking yellow caution light," says Brian E. Hill, co-author with Dee Power of Attracting Capital From Angels (Wiley & Sons) and co-founder of Profit Dynamics Inc., an investment consultancy in Fountain Hills, Arizona. Hill notes that the trend of late is for entrepreneurs to do a lot of old-fashioned bootstrapping-spending their own cash and showing a bit of revenue to attract angels. Picking the right angel investor for your particular company is vital, so do your research beforehand. And, says Hill, start building your network of investors before you actually need the money, because it'll take time.
To get some of the estimated $30 billion a year in angel money out there, you need to be armed with the hard truth: "It's more difficult than it's ever been," says Don LeBeau, CEO and chairman of Angel Legacy LLC, a company that matches entrepreneurs to angel investors.
Still, notes Angel Legacy founder Joe Milam, "There's a growing level of interest on the part of investors." The baby boomers are the ones with all the cash to invest, and they're looking for businesses that benefit society--something the investors care about particularly. If your business benefits the environment or betters the world in some way, boomer angels could be a match for you.
Key things to remember as you're hunting for angels: Put together a good management team while marketing yourself to the right angel (one who shares an affinity for your service or product offering). Present your business idea in clear, simple language (no tech jargon), and have a trusted advisor go over your business plan before you send it out to angels to eliminate any potential issues or problems. Though these tips won't guarantee that you'll find money, they can definitely help. Bottom line: It's hard, but still very possible to get blessed by an angel.