Building up a business from scratch is one of the most difficult tasks in the modern arena of finance. Many life-changing ideas often remain as ideas in the minds of potential businessmen as there is no pool of money to fund the construction of that idea in the real world. That, however, was a problem that was quickly tackled by people becoming unconventional investors called angel investors.
We have already discussed angel investors and who they are in a previous blog, but a brief introduction would be: Angel investors are typically well-off individuals who want to invest in a young company to propel them into the market. They can be doctors, lawyers, or businessmen themselves. Angel investors are those investors that provide a startup with its first round of funding to move it out of the concept phase.
In today’s post, we are going to learn how to find such an angel investor for your budding startup. If you would like to see more of these blogs, check out my website Jerry Mononela.
Where To Find An Angel Investor?
An angel investor was tough to find in the pre-internet days where everyone was connected through often unreliable and scarce connections. But due to the IT boom and digitalization of essentially everything, you can find everything, including angel investors, online.
Though some people still speculate organic real-world connections work better than the ones formed online, it can’t be denied that there are now 2 legit streams to find an angel investor: Online and Offline.
Finding An Angel Investor: Offline
The traditional and more cinematic ways of finding an angel investor would be to hang around the country club with your buddy and his buddies, but unfortunately, that method is not streamlined. A better way to find an angel investor online would be through local business conventions, joining your town’s startup association, or simply participating in events that would help you build connections with a group of people who could be either angel investors themselves or could extend the like to you.
Organic, real-world human communications have always proved to be a bias amongst angel investors as in that way they can physically communicate and have a better look at not only on your business but also at you. A matching personality is a must to find the right Angel investor for your company.
Conventions, where you can meet the person who is going to potentially propel you into success, are beneficial for you too. A local Angel investor will be able to help you out in local processes and provide you with more hands-on expertise. Investors that you meet in and around your locality come with more knowledge about the sector of the market you are going to enter and can steer you away from making mistakes they have already made and rectified in the past. So a local Angel investor is a solid option if you are looking to build your business from the ground up in an established space in an established community.
Finding An Angel Investor: Online
With the onset of the internet and essentially everything shifting online, one can easily find angel investors for their company online. Many online forums can help you get started on the first round of funding for your company. I will list some global as well as South African investment networks that are available for everyone with an internet connection below:
Funded.comCrowdwise
Lets Venture
Angel Investment Network Blog
AngelList Blog
The above-mentioned websites are either global or specific area websites to find an angel investor. To find angel investors online for your South African business, I’d recommend surfing the Angel.co website to find out local and trusted Angel Investors.
Which To Choose: Online Or Offline
To say one is better than the other would be quite subjective, as both have merits that can’t be compared.
Offline or local Angel investors have more ground knowledge about the local market you are about to enter and can guide you better than a person who is not familiar with the locality. He/she can essentially be a better mentor as a budding startup needs all the expertise it can get to get a headstart and not repeat the mistakes its competitors make because they had an experienced person guiding them.
Finding an Angel investor through the traditional methods also comes with many bonuses. While finding an investor in your locality, you have to go through many business conventions and funding events which result in you building out connections for the future even if you don’t necessarily find an Angel investor.
An online Angel investor has his/her benefits in the field of geography. Typically online investors that you can connect with can be from some far-away place but it won’t be of any factor as they can connect with you over the internet. It is also comparatively easier and more streamlined to find Angel investors online as startup founders don’t have to go through the ordeal of buttering up friends, family, and people at local business conventions.
But the above statement does not mean that online investors have to be from some far-away place. Local Angel investors also dwell on online forums and they are a great avenue to get in touch with an Angel for a startup from your locality.
In the end, it all depends on the startup and the type of Angel investor it needs. If a startup requires an investor that can be hands-on with the operations, a local Angel investor would be better suited than an online Angel investor. Though there are many ways an online Angel investor can get a hands-on approach as well, a local investor is always the better option.
But if you want immediate funding and don’t want to go through the tedious traditional process of finding an Angel investor, online forums are the way to go.
It all depends on the type of company you want to build.
About Jerry Mononela
Jerry Mononela is an accountant and finance expert that provides freelance accounting services online and in South Africa. Connect with Jerry Mononela on his Crunchbase profile and check out his blogs here!