Those starting out in a new company often wonder how they might raise enough money to get things moving.
Some people have a little cash for the initial investment but are lacking enough to move forward.
Others start with next to nothing, as did Ron and Arnie Koss, co-founders of Earth’s Best Baby Foods. Says Arnie, “I had $7,000 to my name and I put every penny into Earth’s Best . . . ”
Many companies begin with some initial funding but find, as things progress, they need more.
An angel investor is a person who provides funding for a company’s start-up. This person may request ownership in the company or another type of compensation in return once the company gets moving.
Some angels don’t invest money but invest something else of value to a new business, such as assistance with networking, accounting services, legal services, or introductions to other angel investors who may offer financial assistance.
“With Earth’s Best,” says Arnie, “we were introduced to a gentleman who was not prepared to invest but was able to introduce us to a network of angel investors.”
Our business mother Kristen Brown had a great month but in order to continue to expand decided she needed to either:
- Find angels or other avenues for financial needs of the company, or
- Take on a full time job so she could continue to make money while trying to expand
Kristen wanted information on finding angel investors. The following was provided by a variety of people who have either worked with angels or who may be angel investors.
Where To Look
The first key to finding an angel, which everyone said, was to network, network, network. Steve Nielsen, CEO of PartnerUp.com, writes this about networking:
network to find people who come recommended to you by someone you trust. Sites
like PartnerUp.com and LinkedIn can help you to automate some of that process
by searching the contacts of your friends to identify people who might be worth
getting an introduction to. who you can trust is extremely important. So, work your
Networking can, of course, take place in events such as NAWBO meetings or chamber get togethers, but in order to reach out to the largest number of potential angels a business person must think outside of the box.
Says Koss, “In the case of Earth’s Best, we had a big idea. I went and talked to an accountant I knew.” The accountant said they knew a few clients who might be willing to invest. Other ideas Koss gives include lawyers, venture capital forums (these, he says, are generally available in larger sized communities), and entreprenuership programs at the local college.
“You have to knock on doors,” he adds. “Many of which end up in dead ends, but you are cultivating possibilities.”
Brock Blake, CEO of Funding Universe, says it is key to pitch everyone. “This includes potential investors, friends, family members, neighbors, accountants, attorneys, consultants, government officials, strangers, and etc.” People want to help, and you never know who may be listening or who may know someone who knows someone who might be interested.