Finding an Angel Investor in a Day. Joseph R Bell

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       Get an Introduction

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      Name Dropping

      If someone recommends a potential angel investor, ask if you can use their name when you make contact. Your email or phone call is more likely to be returned if you drop the name of someone the potential angel knows: “Bill Gates suggested I contact you . . .”

      By far the best way to approach an individual angel or an angel group is through a personal introduction. Being referred by someone known to the angel investor provides you with a degree of credibility. And angels are more likely to invest if you come recommended by people they know and trust. Some, including certain angel groups, will consider your proposal only if it comes via a personal recommendation or a member of the angel group.

      However, having another person approach an investor on your behalf means that someone else is presenting your business idea. As helpful as your referral source will be, they won’t necessarily understand your business as well as you do and may unwittingly misrepresent you.

      To help them represent you properly, give them a written copy of your “elevator pitch”—that is, a brief description of your business that could be given in the time it takes to ride up a few floors in an elevator. The elevator pitch describes your company’s product or service, your market, and your competitive advantages. Encourage your contact to use this pitch whenever they approach a potential investor.

      Your referee’s initial conversation with a potential investor might start something like this:

       “Helen, I want to ask you to look at a new business opportunity. I know the founder, and I think the business may be of interest to you. It’s a new franchise concept in the travel industry, focused on adventure tourism for the huge baby boomer market, which is just reaching retirement and traveling in record numbers. One of the founders started another company, which was later acquired, and the other was a key executive at a travel company. I’d like you to meet them. Can they give you a call?”

      2. Where else to look for individual angel investors

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      The Best Person for the Job

      The founder of a company is almost always the best person to go out and network with potential investors. But if you truly aren’t confident enough in your communication skills to find, and then negotiate with, an angel investor, choose someone on your team or a trusted advisor who does have these capabilities to act in this capacity for your business.

      Don’t limit your quest for potential investors to just the people you know. Broaden your search by looking for potential angel investors in:

       Investment forums. Investment forums are held to bring investors together with entrepreneurs looking for funding. These forums might be organized by entrepreneur associations, business organizations, entrepreneurship departments at universities, the media, or chambers of commerce. They generally include presentations by preselected entrepreneurs, talks by investors, and/or training sessions in fundraising presentations.

       Entrepreneurs’ organizations. Many communities, especially larger cities, have organizations composed of entrepreneurs. They hold regular meetings to exchange information, ideas, and contacts. Find out if there are any in your area by looking for nearby entrepreneur groups on the Internet or in the press or by inquiring at your local Small Business Development Center or Chamber of Commerce (see page 29).

       Trade and professional associations. No matter what your industry, there’s almost certainly an association composed of other businesses in that field. Frequently, these associations have local chapters that hold regular meetings, where you can network with other entrepreneurs to help identify investors active in your industry. You can find a list of many industry associations on The Planning Shop’s website at www.PlanningShop.com/associations.

       Small Business Development Centers (SBDCs). SBDCs provide free one-on-one counseling and low-cost training programs to entrepreneurs. Find one near you at www.asbdc-us.org. Make an appointment with an SBDC counselor and tell them about your business plans. They’ll educate you about the different kinds of funding available to entrepreneurs.

       Chambers of Commerce. Contact your local Chamber of Commerce to find out about events they have planned for businesspeople in your community, where you can network for potential investors.

       Trade shows and relevant conferences. Learn about conferences in your industry by going to the websites of your trade association, reading trade publications, and getting on the email event lists of local business schools and the SBDC. Attend as many events as you can and network with other attendees and speakers at breaks between sessions.

       Trade press for your industry. Read relevant industry magazines or newspapers to keep up-to-date with news and trends. These publications provide leads for potential angel investors. Make note of who is being quoted and where they work. Add them to your list of people to contact.

       Incubators. Business incubators offer support to start-up companies by providing entrepreneurs with resources and services. Services include management guidance, technical assistance, rental space, shared business services and equipment, and assistance in obtaining financing. Visit the National Business Incubation Association at http://www.nbia.org/index.php to find local incubators. Research their offerings to determine whether their services are what you need.

       Business schools. Many business schools offer programs and events for entrepreneurs. Contact schools in your area and find out what classes, lectures, and other events you can attend (some are for students only). Business professors are well connected to local companies and business leaders, and if your business looks promising to them, they may be able to provide introductions to potential investors.