How to find an angel investor for your small business
Many small businesses find it extremely difficult to get business loans from traditional lenders. This is especially true in today's tightened lending climate. Most small business owners have limited resources and limited credit history which is often viewed by lenders as increased risk. However, it is important to understand that not all is lost. There are other options for small business owners to get the financing they need. Many times angel investors like to invest in small businesses and be actively involved in helping them grow. This is especially true if the business is local to the angel investor. Because the angel investor likes to take an active role in the business they often choose small businesses that are near them to invest in. This is important for small business owners to know since angel investors can be a valuable source of business funding.
The main question that small business owners have when it comes to angel investors is where to find them. The good news is that if you are willing to do some research, take some time, and be patient there are many different sources that you can use to find an angel investor. Here is what you need to know about how to find an angel investor for your small business-
- Ask the financial professionals who work for you-It is important to keep in mind that you are paying both your accountant and your attorney for their overall financial knowledge. The reality is that the world of finance is generally a small place and both of these people may just know the right angel investor for you to talk to. Best of all, they can offer you an introduction which is often the best way to meet an angel investor.
- Ask your bank management-Again, like the attorney and accountant who work for you, your bank manager may know of angel investors in your area. Most bank managers are highly aware of what is happening in their area in the world of finance and small business owners should not hesitate to utilize this information. Many small business owners hesitate to ask their bank manager since it has nothing to do directly with the bank. However, you should keep in mind that it is in your bank's best interest for your small business to succeed so they most likely will be happy to provide you with information about angel investors in your area.
- Ask other business owners-Many small business owners make the mistake of thinking that other business owners won't be willing to help them. This is not necessarily true. Many times other business owners (especially those that own other small businesses), will be willing to help you with the information that you are looking for especially if they think that cultivating a business relationship with you could help them out down the road. You should work on establishing lines of communication with other small business owners in your area not only to find angel investors but share other valuable resources, as well.
- Ask your local Chamber of Commerce-Every small business owner should be a part of their local Chamber of Commerce. This can be a valuable resource for finding angel investors in your area. Keep in mind that contacting your local Chamber of Commerce may provide you with direct contact with angel investors. Best of all, the Chamber of Commerce may have the information that can connect you with the angel investor who is specifically looking for your type of small business since many angel investors use the Chamber Commerce as a clearinghouse for information on small business investment opportunities.