Throughout history, start-up capital has driven the growth of major brands that have become a part of our lives. Take Google for example, this giant controls over 68 percent of searches made on the internet, employs over 70,000 staff across the globe and is now worth $527 billion. Google’s earliest angel investors ultimately set the company on a fast-track to becoming the most anticipated public offering since the dot-com bubble burst.
Similar to most successful start-ups, early investors bring so much more to the table than just the money – it’s their connections, advice and endorsement that make the biggest impact. Investing is less about gambling and more about making calculated decisions. Whether you’re an entrepreneur thinking about where to place your next investment or a passionate start-up seeking capital funding, here are some of the rules most angel investors live by:
- For start-ups and accelerators hunting for capital funding, increase your chances of finding the right investors by pitching to a local investment group. There is safety in numbers, these networks connect like-minded investors together that matches domain expertise with each investment opportunity.
- Great ideas are important but if you are not a driven founder who can lead a team and execute the vision, your ideas are worth just a pinch of salt. The aim of most investors is to yield greater return on their investment. Some key elements, investors look for in a founder or potential business leader include their understanding of the target market, ability to identify key partners, and a sound approach to promote the product or service. And of course, they always try to determine if the product or service is truly something customers cannot live without.
- Most investors enjoy searching for opportunities hiding in an industry that’s ripe for disruption, these types of investments can be very rewarding. They sniff for clues from external pressures as well, such as increasing prices, service issues or an inability to satisfy demand, which could create the perfect environment for change. The energy industry is undergoing a revolution as we run against the clock to save our planet and find additional renewable energy sources.
- There are gems in almost every industry. Aside from the monopolies, some will go undiscovered, while others will barely survive and a few will reach their true potential. It is imperative to know the personal investment strategy of your angel investors by understanding their niche and area of expertise.
Many investors focus on the primary goal of making smart investment decisions that yield abnormal returns but most start-up founders do not understand how big an influence, savvy investors and advisers can have on the success of their business.
Regardless of which side of the fence you’re on, the best success stories are always built upon successful long-term partnerships.
Source: The entrepreneur