Understand how an angel investor can help your business idea and make your project take off – WAU
The angel investor is a person who invests his own money in startups, companies with high growth potential. Learn more about it in this post!
Having good ideas today is quite common. Market participants constantly come up with products or services that are simply incredible.
And we are not only referring to the great success stories, like Facebook or Apple, but also to minimal ideas, like Airbnb, which connects homeowners with travelers from around the world and which today has a stock market value of 31 million dollars.
The phenomenon is known as startup, a business model that has high potential and needs help to get started in the market. This trend has gained strength and relevance in the digital age.
This first impulse, although it does not represent a lot of money for a successful entrepreneur, may be inaccessible for an entrepreneur who is just starting out. So the million dollar question is: how to get resources to finance an idea?
We know that you have a great idea, that you need a starting capital to take off and conquer the market. And you are probably waiting for a miracle to happen. Good, what you need is not exactly a miracle, but an angel investor.
In this post you will discover:
What is an angel investor?
An angel investor is someone who invests their own capital in ideas with high growth potential, the famous startups.
In general, they are successful stakeholders, linked to the world and the culture of business, who in addition to financing, act as consultants, make available their network of contacts and are involved, to a greater or lesser degree, with the idea.
He is a philanthropist in the world of marketing who, knowing the vicissitudes of a company due to his personal experience, places emerging ideas under his protectorate. Sometimes, they have a minority stake in the company (between 5% and 10%) and rarely hold executive positions.
Who is Maecenas, the precursor angel?
Caius Cilnius Mecenas, a rich and influential advisor to the Roman emperor Augustus, is considered the great precursor of this thought.
It was he who initiated this trend in the first century BC, being a protector of the arts and culture. Perhaps in history it was the first time that anyone thought of investing money recognizing value to the beneficiary.
In this way, the great powerful began to subsidize the work of brilliant artists, becoming a consolidated practice in the Renaissance.
Thanks to his conceptual contribution, artists like Michelangelo, Leonardo da Vinci, Botticelli, Caravaggio, among others, were able to leave us their magnificent legacy.
And today, in the 21st century, big businesspeople continue this corporate sponsorship thinking, helping small business owners to take off with their big ideas, creating a world with better services and products for everyone – and, in addition, earning a few million.
How does the angel investor choose his investments?
Remember the following: money is a language that everyone understands, but few know how to speak.
An angel is not an investor who simply goes around distributing money, on the contrary, he chooses carefully and demands seriousness from those who ask for support. He will only disburse his money when he clearly sees the impact and payback of his proposal.
Information about the entrepreneur
As in most cases, the first thing when evaluating an investment is to see the curriculum of those who are asking for help, their background in the middle, the history of the idea, where they are and the team that accompanies it.
Investigating is a very common habit among entrepreneurs – it is at this point that we understand why LinkedIn exists.
Power of the idea
The second step is to understand the potential of your project. Great ideas are difficult to explain and, therefore, it is essential to define the business model very well. For example, Facebook initially received the first support from Peter Thiel, one of the most famous angels in Silicon Valley, for $ 500,000.
What he saw on that network was not only the speed with which the idea gained support, but also a metric that impacted him: the length of stay – that was the essence of the model that attracted the attention of other angels.
On Facebook, we went in and spent several hours browsing, without even realizing it. Two years later, in 2006, he made a new contribution of $ 27.5 million with other angel investors.
And, finally, the management capacity, which is assessed in the business plan. Your ability to develop rationally, clearly and directly the steps necessary to achieve your goal will be revealed if you understand management. Everyone has good ideas – what is scarce is the talent to put them into practice.
That is, the angel investor wants a return even if he does not depend on him. He invests thinking that the idea will work and not only make money, but also create jobs and promote social development. Therefore, without administrative capacity, it will be nothing more than an act of charity.
Where to find and how to attract angels?
There is always the possibility of making direct contacts, but if you are not that connected and you do not have an influential network, the good news is that this modality is widely disseminated on various platforms of angel networks on the internet.
Angel Investment, for example, among many others. It is only at Google that you will achieve a tailored platform.
Here the old school of entrepreneurs applies: chasing dreams with scientific determination. Create the project, study the market, adapt to the requirements, demonstrate seriousness, think like the investor, start sending the material through the platforms and schedule meetings.
What’s your awesome idea? What is the cash return? How will the jump from the micro to the macro be? Can you make a prototype to start on a small scale? Having a startup is not for everyone, it is necessary to have a certain profile. You must be persistent, realistic, dreamy, crazy and organized.
In marketing, faith in our ideas plays an important role and the digital world loves these types of people. Have no doubt that an angel investor will appear to help you.
If you want to know more about it, read our Digital Marketing ebook and understand why you should invest in it!