An angel investor takes a stake in a company in exchange for its investment. The angel investor and start-up company agree on the level of participation expected from the angel investor. Do your research and have some answers ready for some questions i would ask.
1. What makes a good business idea great?
If the business idea clearly answers a need in the marketplace, a product or service that solves a problem that is not already being solved in the marketplace if the need is already being met by well-entrenched competitors, it can still be a good idea if it’s a new, cheaper or more clever way of doing it or better execution of an existing idea. Something that solves a problem, satisfies a need or improves quality of life. Does your product fit in ?
2. What do you think are the traits of a great entrepreneur?
Be driven; Always educate yourself, Doing something you love, Willing to take advice, be Resourceful. Have a vision of the future, have the drive for the day-to-day, to work unending hours; and the desire to never give up. Every great entrepreneur is passionate about being successful. They are not just passionate about their business idea, but have enough passion to weather all the obstacles and see things through to the finish line. Every great entrepreneur is extremely pushy. I’ve learned that all great entrepreneurs are pushy people and they always deliver. I want to see that passion.
3. How do I know if there’s a real need for my product or service?
Make a list of every product out there already answering the need and be super critical as to whether yours is a better mousetrap. Also ask your family, friends and enemies if they would buy it and what they would readily pay. It’s important to test before you invest to see if there is a need for your product or service. I use catalogues, shopping channels and internet websites to do this. Put it for sale on the internet and see if people who do not know you purchase it! Do you have any statistics and numbers in case I ask?
4. What are the most important first steps a new entrepreneur should take?
Put together a business plan. Once the plan is together, then test it out with people you trust (friends, relatives, mentors, bankers, etc.). With positive feedback, the next step for the entrepreneur is to raise money and put a good management/advisory team together. Be clear about what’s most important. Figure out what it will cost to produce your product or service, what you can sell it for and to whom. Educate yourself in the product and the industry you are attempt to enter. Find a customer. Any of that in place ?
5. How do you create a business plan that works?
For most people a lengthy business plan is virtually useless because you need to change it constantly in response to things outside your control. The simplest form of a business plan is just a list of what’s most important to attend to and what’s not. Allocate all the time and money that you can invest into the business. And write down your strengths and weaknesses, then cost out how much it will take to partner or hire somebody to cover the weaknesses. Get someone with financial experience in your business category to give you advice and help you vet the plan.
On the othet hand, People spend way too much on a business plan. When you start – it is important to have vision but a business plan is theory and when you are starting there is very little room for theory. At the beginning, any plan beyond the next quarter is a dream; after you get bigger the next quarter becomes the next 2 and so on. As you grow, size gives you some predictability.
6. Where can I get help creating a business plan?
Sit down and write out a clear picture of what your product or service is, what it will cost, what it will sell for and who will buy it. Then put down on paper the concrete steps you’ll need to take to bring it to fruition. After that you can ask your friends and enemies to honestly critique the plan and share with you what’s unclear, what makes no sense and what’s missing. If you not able to do it yourself, look for a consultant in the area of business that you would like to go in.
There are plenty of books and websites to help you craft a good business plan. Entrepreneur magazine is a good start, and there are plenty of others available at bookstores. Bankers and small agencies like the Small Business Administration can also help you craft your plan. You can also get help at universities through entrepreneur programs. I spend less time on my plans and found more time talking to people who will actually buy my product. I never had a business plan for my first businesses.
7. How do you compete against the big guys?
The big guys usually have the corner on money, but remember the little guy always has the corner on creativity. If you can position yourself as an expert in your marketplace early on, you’ll get the leg up on all of your competitors right away. The media is always hungry for statistics, so creating your own market reports and distributing them will soon have the press calling you instead of you running after them for PR. And if you can steal the limelight, you’ll steal the market share.
Your strength will be that you are small and can do the things they can’t do. The best way to compete against the “big guys” is to find a niche that they are not covering. Be sure to keep your overhead low so you can beat them on price. It is also great if you can offer a personalized service, like a concierge type service. Give them more and better service at a lower price. The smaller you are the more laser-like your focus needs to be. A single man cannot defeat an army unless he finds their weakness and attacks them at that point one on one. It’s nothing wrong in being small, just dont make yourself bigger than you are.
8. How do you build a great team?
Always choose attitude over experience! When I hire people I make a habit of never looking at their resume because most people spend most of their life in the wrong job. I never hire complainers or excuse makers because they’ll find a way within my company to do more of the same. People with a can-do attitude are a pleasure to work with. Positive people are willing to learn, eager to try and somehow find the solution to anything they don’t already know. They’re always great team players, and teams build big businesses, not individuals. Make sure they are focused and in the business for the right reasons. You can build a great team by bringing in people you usually could not afford by offering small piece of the action or an upside.
There are lots of ways – but the first thing is be a great leader. People naturally want to be lead and not managed. Look in the mirror – are you the one who can lead? The guy with the great idea don’t have tob e a great leader, he just need to accept and understand that someone other needs to lead for success.
9. What makes an investor put their money into a deal?
First of all, an investor likes high return and accelerated payback. Generally, there is going to be more risk in what you are offering to an investor, so you must offer the him or her a higher rate of return either through the existing deal or continuing involvement, for example, the first right of refusal on new projects and new opportunities. My most important criteria when making the decision to invest are, Do I trust the individual? and Do they have the fire in their belly to bring the business to the finish line? Trust and believing in the CEO, knowing that the business can grow and distribute large profits, and knowing you have a patent that can be defended as well as licensed out to a larger company.
10. most important in the presentation’s ?
What will you do with my money? and how will I get my investment back? It’s important that I see as little risk as possible, and convinced that I will not only get my money back, but also a high return on investment. First step make sure you need investment – or do you simply need a loan. Most people that want an investment simply need a loan.
This is the greatest time in history of concentration of investment capital in cash for startups. Be part of it and well prepared.