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- Your Business, Their Investment (November 1, 2024)
Your Business, Their Investment (November 1, 2024)
Dave Lavinsky
November 01, 2024
Here’s what we will cover today:
Learn what angel investors expect (equity, ROI, risk tolerance)
Uncover the latest user design statistics
Learn a valuable hiring tip for early-stage startups
Quote of the Day
"The only limits are, as always, those of vision.”
~James Broughton
Today’s Tip
As an entrepreneur, you're likely seeking funding to scale your business. Angel investors can be a great source of capital, but they have specific expectations.
Here's a quick breakdown of what angel investors typically look for:
Equity Stake: Angel investors usually expect to own a significant portion of your company, often between 10% and 35%.
High ROI: They aim for a substantial return on their investment, often around 30% annually.
Risk Tolerance: Angel investing is inherently risky. Many investments fail, so successful ones need to generate even higher returns to offset the losses.
To attract an angel investor, you need to:
Present a Strong Business Plan: A well-structured plan that outlines your business model, market potential, and financial projections is crucial.
Demonstrate High-Growth Potential: Angel investors are typically interested in companies with the potential for rapid growth and significant exits.
Highlight Your Team's Expertise: A strong team with a proven track record can significantly increase your chances of securing funding.
You can position your business as an attractive investment opportunity and increase your likelihood of securing angel funding by understanding these expectations and addressing them in your pitch.
Today’s Resource
Tired of Chasing Venture Capital?
Sick of the high barriers to entry and the huge valuations demanded by VCs?
There’s a Better Way.
Angel funding is a more accessible and flexible way to raise capital for your startup.
I’ll show you how to:
Identify the right investors
Craft a compelling pitch
Close the deal
Don’t let a lack of funding hold you back.
Trivia
Today’s Question: How many pairs of shoelaces are sold annually?
Previous Question: What does “tranche” mean in financial terms?
Previous Answer: Slice or Part.
Tranche is a derivative of the same French word meaning "slice." In financial terms it means a part of a transaction.
In many cases, when you raise funding, it will be delivered in tranches. For example, if you raise $5 million, you may get the first $2.5 million today (first tranche) and the other $2.5 million once you complete certain milestones (second tranche).
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