.One way to finance a business is to tap angel investors. However, finding the right investor and getting them interested enough to listen to your pitch, much less agree to finance you, is not easy.
Sally Chamley has secured £300,000 for her UK-based luxury furniture design business Black Orchid Interiors, through a business angel network. Established in 2004, her company mixes a range of classic and contemporary furniture and home accessories for the discerning and affluent home furniture market. Here are her tips on how she got angel investors to finance her business.
Grow your business to break even first. Entrepreneurs that have built turnover to breakeven and have a good business plan generate a higher valuation at the point of investment. Therefore you will not be expected to give as much of your equity shares away in exchange for investment. Make sure that you raise enough in your plan to comfortably achieve your goals, many plans fail due to being underfunded for the task ahead. It is also more difficult to go back for more money.
Get your mindset right before you go for investment. Be prepared to get real and start behaving as a team player in a much bigger game!
Finally, don’t be intimidated by an individual’s wealth if they are private investors. Growing your business to breakeven and having a good plan has already earned you respect in the investor’s eyes. Many investors remember how hard they worked to raise their first million!
SOURCE: Lyve Alexis Pleshette, “Sally Chamley: Success in Securing Angel Investor Financing,” WomenHomeBusiness.com
This is a very sound advice. Some folks just think they should just go out there and investors will jump in on their business (I guess it happens to some, but that’s more the exception than the rule). Then they get frustrated that investors are not interested in what they offer because they haven’t done their homework right