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Angel Investors

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Angel Investors
Are you ready to raise capital today, then click here.
If you are ready to meet with investors, then click here. 
 
Estimates vary, but the United States is generally thought to have around 3 million angel investors who invest in small entrepreneurial ventures. They invest about $50 billion annually in young firms, such as yours.
 
Business angels are the oldest, largest, most often used, and most important source of outside funds for entrepreneurial firms like yours.
 
The business angel market is exploding in size, particularly in the United States. But despite this scale and the significant size of the angel investor market, the potential is much greater. According to studies done within the last ten years, the potential size of the market is 10 to 20 times larger than it is today.
 
The primary reason for this is that the angel investor market is inefficient. Most angels have difficulty finding suitable investment opportunities. Therefore, they have substantial funds still availalbe for potential investment. These funds have been allocated to such high-risk investments as your company might present.

Because angel investors lack a sufficient number of business proposals matching their investment criteria, angels represent a tremendous funding market for your business.

This creates 3 very interesting challenges for you.

  1. Finding these investors, and particularly the "right investors" who would be interested in your opportunity.
  2. Creating an opportunity that motivates investors to invest.
  3. Negotiating with these investors to get a deal done. 

As a client of LAUNCHfn, you are in a much better position to meet these challenges.

Finding Angel Investors

There are thousands of angel investors in the LAUNCHfn investor network. So, as a client the first challenge - the challenge of finding investors - is automatically resolved. As you move through the LAUNCHfn process, you are prepared to access the angel investors who already subscribe to our matching process.

Motivating Investors To Invest 

There are three important factors that motivate angel investors to invest:

Trust in the venture entrepreneur and the management team. After all, the investor does not know you. You are asking them to take a minority position in your company - a company that you control. You must establish some level of trust with potential investors. Being a client of LAUNCHfn impacts the concerns investors have regarding trust. Our EVALUATION and ASSESSMENT processes, as well as our LAUNCH PROCESS, means that we have completed a series of internal reviews and we have already collected a variety of information about your company. the importance of this process is that we build a trust relationship before you are introduced to these investors. So, when you find these investors, a foundation of trust has already been established!   

Opportunities to co-invest with other more experienced investors. Most angel investors are inexperienced. Many have made only 2 or 3 investments. And there are many virgin angels in the market who have never made an investment before. Investors simply do not want to be in a deal alone! One of the major advantages of being a LAUNCHfn client is that you gain access to groups of angel investors, not just one or two investor prospects at a time. This resolves the co-investment challenge for interested investors. Each investor knows that there are other investors interested in investing in your opportunity. Collectively, when they invest, they become co-investors.

 

Opportunities to learn from successful business angels is an important part of investing for many angel investors. Due to the high risk-nature of the process, knowledge sharing, and developing the ability to make wise investments, is important. For this reason, LAUNCHfn has created How To Be An Angel Investor which provides opportunities for angel investors to learn and to meet experienced angel investors. This ability to learn is an important factor in getting investors in our network to make investments in our clients.

Negotiating With Investors

Negotiating with investors is a major challenge for entrepreneur, who have little or no experience at this kind of negotiating. As our cleint, you are concerned with loss of control. You need advice about structuring your investment opportunity.

Many angel investors have little experience in structuring investment deals, preparing term sheets, and understanding the language of finance. When we consider the fact that the entrepreneur has the same lack of experience, we have an environment that is uncomfortable for both the investor and you, our client.

To resolve this, LAUNCHfn has designated a Deal Champion. The Deal Champion is the professional liaison between our client and the investors. The Deal Champion works for you, our client and not LAUNCHfn. The function of the Deal Champion is to facilitate the deal, and to see that the deal is structured in a way that provides maximum benefit to the investor group, without placing you at undue risk, or threatening your control. Issues may include dilution, protection of minority shareholder interests, percent of ownership, investor exit strategies, etc. If the group of investors has concerns about the structure of the deal, the investors may share the cost of this Deal Champion. This increases the comfort level of the investor group, and enables you to make more informed decisions to structure the deal in a way that you can accept, when compromise is required.

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