Monday, August 17, 2009

Business Plan for Angel Investors

Entrepreneurs I speak to often ask what to include in a business plan for angel investors. Is it a different type of business plan, does it contain different sets of information and what exactly are South African angel investors interested in?

Although almost every business plan is different depending on the business, the industry and the purpose of the plan, a number of issues will also remain the same.

When presenting your business plan to an angel investor you must understand that they will be very interested in your spreadsheets and forecasts, but you must also realize that it is typically an entrepreneurial optimistic approach, which causes problems with forecasts.

It may be a good idea to have forecast for different scenarios, looking at both optimistic and less optimistic scenarios.

This will show your Angel Investor that you indeed are a rational thinker and concerned about the money as well as the truth. If the Angel Investor cannot trust you your chances of being funded are nil. An angel investor is betting on the jockey not only the horse. As an entrepreneur you must be honest with yourself as well as your financial partner.

They want to make sure you believe in what you are doing and that you also have risked your own capital, time and energies into the new business. Angel investors want you to succeed and often they also like to give their input and if you end up taking their money for your startup, the need to realize that their input needs to be taken seriously.

Angel Investors are typically much better investors for a long-term business plan that Venture Capitalists, although they do not usually come with the incredible network to help you succeed. Venture Capitalists are more interested in themselves and making money on their investment then what you get out of it or the future of the business with you in it. An angel investor is interested in you, the future of the business and the possibility of making a whole lot of money on their investment. Please consider all this when presenting your business plan to an Angel Investor.

Thank you for the contribution of Lance Winslow from Article Source to this thread

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