For entrepreneurs, especially women, finding the money to start and grow a business is a looming issue. Most tap resources like their own savings, friends and family, and bank loans.
Yet another valuable option, and one sometimes overlooked, is called an “angel investor.”
An angel investor is that rare person who, in exchange for a piece of the business, is willing to take a risk with their own money and help fund early-stage companies. Even better, aside from that all-important early infusion of needed capital, angels typically provide help beyond the investment, such as networking, experience, contacts, knowledge, strategy, and so on. These extra benefits can be especially helpful for female entrepreneurs.
If you have ever watched Shark Tank, the sharks are angel investors.
Unfortunately, most of us are not fortunate enough to get on Shark Tank, and in that case, finding angel investors may not be that easy. But it need not be that difficult either. Here’s how you do it:
1. Be ready: To get an investor to take a risk on your business, your business must be one that is worth taking a risk on. You have to have a great idea yes, but also a great team, a great plan, and the proven ability to execute on that plan. If you were an investor, would you invest in your business? That is the question you need to ask yourself.
Angel investors will want to see your business plan, financials, and will want to know how much money you need, and why. What will you use it for? So step one is to have your business act together.
If you need help getting investor ready, this site for female-owned startups can help.
2. Where angels hide: Where do you find angels? There are many places:
- Network: The best place to start usually is with your own extended network. Speak with family and friends, with colleagues and associates. Put the word out to your lawyer and accountant. This sort of informal networking works well because not only do these people know you, but you can get an introduction to any potential investor.
Beyond networking, there are a variety of other options available to you:
- Small Business Development Centers (SBDCs): Part of the Small Business Administration, SBDCs are places that typically work in conjunction with local universities and offer all sorts of assistance to businesses and startups. As such, by working with your local SBDC, you can further your network and potentially meet angel investors who are part of that network.
- Social media: LinkedIn is a great place to search for and locate potential investors, as are Facebook and Twitter. If you want to attract people this way, be sure that you have a strong social media presence. That is a requirement.
3. Online angel groups: Not surprisingly, angel groups have begun to show up online and several are dedicated to helping fund women-owned startups. These sites serve to introduce female entrepreneurs to angel investors. An online search will provide you with a list to choose from, but here are some to help you get started:
- Golden Seeds: This is an early stage investment firm “with a focus on women leaders.”
- 37 Angels: “We are a community of women investors.”
- Angel Academe: “We invest in women-founded tech businesses. We introduce more women to angel investing.”
- Topstone angels: This is another all-female group of investors who encourages women to apply.
- Belle Capital USA: “Companies seeking our capital must have at least one female founder or C-level exec, and/or be willing to recruit top female talent.”
That should get you started, but if you need even more possible investors, this is a great list.
About Steve Strauss
Steven D. Strauss is one of the world's leading experts on small business and is a lawyer, writer, and speaker. The senior small business columnist for USA Today, his Ask an Expert column is one of the most highly-syndicated business columns in the country. He is the best-selling author of 17 books, including his latest, The Small Business Bible, now out in a completely updated third edition. You can also listen to his weekly podcast, Small Business Success.© Steven D. Strauss
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