Tips on Landing a Deal with an Angel Investor to Help Grow your Business
If you plan on your business growing and expanding, deciding on how you will find funding should be of utmost importance. You have two options to finance your business- either through debt or equity financing. Debt is when you borrow an amount of money and pay it back generally with interest. In contrast, equity finance is where you acquire funds by selling a share or percentage of your business to investors- such as angel investors and shareholders. Angel investors are different from banks, as they invest their own money and offer a quick route to funding. We at M.A.S Partners, the leading small business accounting firm in Zetland, understand the impact an angel investor can make on a business, and have provided some tips on how you can have an angel investor invest in your business.
Have a Sellable Idea
Every business starts with a unique idea. Be sure to have a unique idea so you can use it as a competitive advantage. Whilst a creative idea is important, what is more important is the profitability. Angel investors care for how much profit you are able to make with your idea. As such, before even considering investments, you must decide exactly how your business will make money, and how profitable it can be.
Have a Good Business Team
Often, angel investors are looking for a team they can trust to invest in. Since these investors are generally more involved in the business process, they are looking for people they know they can work well with- as sometimes the people are more important than the proposition. Angel investors are not running a charity, so ensure your team knows exactly what you will do with their money, and how it will lead to more money in the investor’s pocket.
Practice and Memorise Your Presentation
The pitch is everything when trying to reel in your investor. Ensure that you start your pitch with an enticing opener. Investors will not believe in your project if they are uninterested. Make sure that you know your numbers well, such as your current costs and revenue; forecasted costs and revenue after the expansion; as well as marginal profit; and cost per customer acquisition. The investor must know that your business is reliable, and they will not want to invest in a business that is not proven.
Hire a Small Business Accountant
Small business accountants help you manage your finances, through accurate reporting, taxation lodgements and receivables. Our small business accountants at M.A.S Partners have worked with a wide variety of businesses which ensures that we are prepared for any market. Our accurate reporting will help you give detailed sales to your investors, which will help with your pitch. For more information on our small business accounting services, click here.