Every entrepreneur is well aware of investors who love to invest in new risky businesses. These prominent individuals are known to convert new ventures to significant players in the market. Yes, I am talking about angel investors. From Ola, Uber, Myntra to Paytm, Paypal, etc. all companies became big when angel investors backed them with their investments. Many times, being the owner of a new startup, things start getting tricky for you. Angel investors are some of the best managers. The more we learn about them, the more mysterious they become. In this article, we will try to understand the importance of angel investors for new startups.
Importance of Angel Investors For New Startups
What Are Angel Investors?
Let’s first understand some basics about angel investors. Angel investors are filthy rich people who invest in startups for equity. They can offer seed capital from a million dollars to 10 million dollars. However, while giving so much, these investors have their sixth sense always activated. Ordinary investors may lose money, but when it comes to angel investors, their chances of winning are at 99 percent. An angel investor takes a portion of ownership in your company after giving money. He or she guides you so that you gain some immunity against unfavorable market conditions. You must always seek them for your startup benefits.
Benefits Of Angel Investors
1. Angel Investors Are Risk Takers
New owners forever dream of people who will take risks with them. That’s why they prefer to get angel investors for startup instead of banks and other financial institutions. Angel investors have their personal choice. They handle your startup as well as their investments with perfection. You start nurturing from the guidance angel investors provide to you.
2. Better Network
No matter how hard work you put while forming a business network, obstacles will arise from time to time. Sometimes, no one shows interest in your business. Speaking of angel investors, they are always ready with a helping hand. They also let you take advantage of their resourceful business network. A business network is necessary for you to expand.
3. Better Management
Quite often, new companies fail because of poor management. It’s pretty reasonable as you are new in the business world. Angel investors come with diverse experience from different industries. They know what to do and what not during a series of difficult situations. Therefore, you must have angel investors behind your business.
Startups That Went Lucky By Angel Investments
Like I said before, angel investors skyrocketed the growth of many startups. Here, I have listed five startups that went big by angel investments.
- OlaCabs- The largest taxi aggregator in India, OlaCabs, was supported by Anupam Mittal from India. OlaCabs expanded dramatically after gaining some angel investments.
- YourStory- YourStory went big when TV Mohandas Pal fueled it with his investments. Nowadays, the platform is spreading like wildfire.
- Unacademy- A paid-learning platform for all students and competitive exam aspirants. Girish Matharubootham, an Indian angel investor, supported it.
- Myntra- Anand Ladsariya made some significant investments in Myntra, a popular ecommerce platform in India.
- OYO- OYO is a big name in India. Sanjay Mehta, a reputed angel investor from India, supported it.
Where To Find Angel Investors?
The easier it is to seek help from them, the harder it becomes to find them out. Still, many platforms exist where you can search for angel investors. One thing to remember is the type of investors you are exploring. Angel investors have different tastes. Some go for tech startups, while others may love to spend in the financial industry. Whatever happens, never try to approach wrong investors. By doing so, you are wasting your valuable time. Also, while approaching investors, find out their background. Today, there is a huge possibility of you approaching the wrong people. Everything seems fine with them at first, but after some months, you will face several problems. In case you have your network, ask people about where to find them. Chances are, you will get one or two from it. Start registering to social media platforms, especially LinkedIn. LinkedIn has an influential social network where entrepreneurs and other people interact with one another every single day. The platform has made many things for entrepreneurs quite easy.
In summary, we have seen the importance of angel investors for new startups. A startup journey is never going to be easy, get this down in your mind. Most importantly, stay prepared before starting your new business. You will find angel investors if you work hard every time. There are numerous funding sources such as VC companies, startup incubators, accelerators that can help you kickstart your project. However, angel investments can make you fortunate within a short time, and at the end of the day, you will see more success in the future.