Nonaffiliated Angel investors are those investors who are in no way connected to you or affiliated with your business. They usually fall in the following category.
Professionals. Once again, this group of potential investors in your business includes lawyers, accountants, consultants, doctors etc. who you do not know personally or do business with.
Middle managers. Angels in middle management positions start investing in smaller businesses for 2 major reasons which are either that they are bored with their jobs and are looking for outside interest or they are nearing retirement or fear they are being phased out.
Entrepreneurs. This category of angel investors like investing in other businesses and making a profit out of it as a part of their entrepreneurial streak. They are keenly interested in businesses and many times have a keen knack for investing in the right kind of businesses. Entrepreneurs who are familiar with your industry have the potential of making excellent investors by not only bringing in the money but by also providing great advice and bringing in their past experience to the table as well.
How to Seek Non Affiliated Angel Investors in Your Business
These are the methods that you can use to seek investment from nonaffiliated Angels in your business.
Advertising. You can advertise for investors in classified ads in newspapers. Classified advertising is usually inexpensive, simple and effective. If you choose a good business resource and outlet, the results can be quite effective. For example advertising in the business opportunities section of your local newspaper can be a good idea. Using a well know and widely acknowledged business media like the Wall Street Journal can bring in some excellent result in finding angel investors for your business.
Business brokers. Just like a business broker can help you get started with finding a business to buy, he can also help you find hundreds of people who might be interested in buying into your business. These people may be simply interested in investing in your business even if you are not selling it outright. You might have to do a little convincing and dealing with the business brokers in order to have him get you potential investors since most of the business brokers are looking to find businesses that are for sale outright.
Telemarketing. This method had also been called ‘dialing for dollars’. What you do is you get a list of wealthy individuals in your area and then you begin making the calls. You can either make the cold calls yourself or get someone else to do it. One of the crucial factors in this method is motivation and professionalism. You have to be highly motivated to follow this method and at the same time you as the business owner might be the best person to do it yourself and speak to people personally. All you need initially is to be able to set up an appointment with a potential investors by getting them interested enough over the telephone call.
Networking. You can find potential venture capital for business by attending local venture capital group meetings and becoming part of the businesses associations. Making contacts and networking is time-consuming but can also be very effective. Many newspapers contain an events calendar that lists when and where these types of meetings takes place.
Matchmaking services. Even businesses have matchmakers that run a huge variety of services that offer face time with investors to websites that post business plans for companies seeking investment. The fund-raising is largely dependent upon the matchmakers screening process. For example, does the matchmaker have a rigorous selection process or does it take money from anyone regardless of the funding prospects? The thing to watch out here is that a matchmaking service may charge as much as $25,000 to locate an investor in addition to a percentage of the funds raised. Before using a matchmaking service to match your business with an investor, you should get a list of their clients to assess recent successes and failure. A good place to start is Active Capital, a government-sponsored matchmaking service that allows entrepreneurs to raise funds of investors for the United States without having to register separately for each state. For more information visit www.activecapital.com.
Word-of-mouth. It is a fact that most of the business owners find funding and money to raise the capital through their own family and friends and people they know. Even if these people are not directly investing in your business, it is important to spread the word around that you are looking for potential investors in a business. They may further know people who are interested or someone you know would be good at networking and a good source of referrals. Basically you do not know what then of contacts a person you might know has until you spread the word around and wait for the results to filter in.