Tuesday, June 7, 2011

Should You Pay To Find Angel Finance?

If you've ever typed the words ‘angel finance’ or ‘angel investor’ into your search engine with the intention of finding finance for your business plan, then you've probably been bombarded with all sorts of websites that promise to find you an angel investor for your business.  The question is, when those websites require you to pay a fee to join, is it worth it?

The answer is not as simple as it seems, and it really depends on the website in question, and what you are looking to gain from signing up.

Why Sites Charge Membership Fees

The first thing you need to consider, when you are looking at a website that charges a membership fee to join, is why they are charging that fee. Is making money off your membership the primary goal, or are they charging a fee to ensure that the people who sign up are serious about business, and will be valuable contributors?  It’s a sad fact that there are spammers out there who prey on this type of site, and sometimes, charging a small fee can act as a deterrent.

Often, the sites that are basing membership fees on this reason will have a small fee only, and it might be a one off registration fee, rather than a membership fee that is recurring.

If the site is purely there to make money, then it probably won’t offer all that much in the way of information, but rather, will focus on having investors and entrepreneurs sign up to meet each other – something that you can do without paying for the service.

What Sites Do For You

Another thing you need to understand, when deciding whether to sign up for angel investor sites that charge a membership fee, is that your success is still based on the strength of your idea, and the market demand for your product or service.

Paying for membership to an angel investment network is not a guarantee that you will find an investor, it just gives you an easier platform on which to present your ideas to those investors.

That platform, however, can be a valuable tool in your search for an angel investor, as it can give your business idea international exposure, and bring your idea to the attention of angel investors who might otherwise prefer to be anonymous – and notoriously hard to find!  Yes, you can find them on your own, offline, but it can be a time consuming, laborious, and difficult task.  Having everyone assembled in one location takes the hard work out of the equation.

Is It the Right Choice for You?

As you can see, there are definite pros and cons to paying for angel investment site membership or advertising, and you will need to weigh those pros and cons based on your unique situation.

If you have a solid business idea, that you are sure angel investors will be interested in, if you have a viable and well constructed business plan, and if you are looking for a fast, convenient way to present that idea to potential angel investors, then this could be a good idea.

You will still need to evaluate each site on it’s merit, and make sure that you will indeed be getting the exposure that you are paying for, but on the whole, investment portals that charge a fee might not be a bad idea.

Think about it this way: the time, effort and cost involved in finding investors, contacting them, travelling to see them, and all of the other things that go along with looking for an investor ‘the old fashioned way’ are an investment in your business, right?  The same can be said for advertising on the right investor portal. 

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