Angel Investors - How to Raise Seed Capital

From Adviceopedia

Angel investors typically invest AFTER the "Friends and Family" round and BEFORE the professional venture investors. Angel investors in the US invest about $23 Billion into startups and the estimates are that there are about 250,000 of them. Angel investors generally want to be able to see a 10x return on their investment in a startup. While that number may strike some as high, the reality is that most of the investments wont work out. So angel investors need a 10 bagger to produce about 25-30% overall returns from their Angel investment activities.

Tips on meeting with the angel investors

Ready for that meeting with an angel investor? Here are some key point to keep in mind. Note that some of these were inspired by Ian Berg from EFT Funds:

• Plan "A" rarely works; be ready for a plan "B". Be able to describe other possible options.
• If you don't know the answer to a question, just say so.
• Credibility is crucial. Get introduced to the investors through a friend or lawyer/accountant.
• Valuations need to be real. Dont waste the investors' time with inflated views of the value of the new venture. General rule of thumb is that first round Angel investors are valued at $1-4 million.
• If you are not a natural salesman, get a partner. All businesses need to sell. They need to sell themselves AND their products. Your company will need that capability. If you don't have the natural sales gift yourself, get a partner who can sell ice to the Eskimoes.