New York SBDC Research Network

By Tim Berry From Bplans Startups and high-growth businesses can learn a lot from angel investors, regardless of whether you’re seeking funding to grow your business or not. And if you pitch and get turned down, their feedback can be really valuable in helping you think about what you need to do next to meet your funding goals. I’ve seen this over and over in my dealings, both as an angel investor on my own and as a member of a local angel investment group. Most angel investors don’t just reject startups—we explain why. And we don’t just say yes either; we explain what else is needed... Angel investors are individuals willing to invest their own money to fund new startups. Most of them have made money with startups; they’ve been through the wringer, they’ve succeeded, and they are in a position to share. They can teach you a lot. So if you’re a startup, always focus on listening first.

When you pitch a startup to angel investors, you want to get questions. If you don’t get questions then your pitch fell flat and nobody is interested. My advice to you, if you’re pitching, is to love the questions that interrupt and answer them eagerly. Do they throw you off pace, out of your planned sequence? Welcome to startups. If having your pitch sequence disturbed bothers you, keep your day job. More from BPlans.com .

Links to each website. ALSO: Download (for a fee) a that list includes company name, street address, telephone/fax & URL where available. One paragraph organization description (source: the company's web site or press materials). From the BoogarLists .

An article titled " Perform Due Diligence on Potential Investors " appeared recently on Business Week's website. Its author (Tom Taulli) reminds those pursuing venture capital and/or angel financing that, despite current lending conditions, there's still an obligation to review the qualifications and histories of potential investors. Just because traditional lending sources have tightened is no reason to act desperate, and give away too much during negotiations. Several suggestions are then offered as to what "due diligence" should be done. In addition to these, I recommend these two sites (both of which I've recommended in previous blog posts): 1) TheFunded (written about here on 5/21/07) 2) Punctuative - the Venture Capital Database (written about here on 8/6/08) Both sites are useful in that they enable those seeking investment to comment, critique, and/or condemn the performance of some funds out there. A little background, then, can only help.

Asheesh Advani, president of Virgin Money USA , gives hope for entrepreneurs looking for angel investors during the recession. In an article from Entrepreneur " You Can Still Find an Angel Investor ," Advani offers three keys for entrepreneurs looking for angel investors: resilience, patience and persistence. By focusing on those three keys when pursuing prospective angels and keeping in mind that “ In 2009, angel investors want to hear you tell them about earnings growth, and the decision to invest is based on how much affinity they have for the business concept and the principal owners,” entrepreneurs will likely strike the angel’s interest. Another bit of hope comes from Dallas Mavericks’ owner Mark Cuban . He states in an article from the Dallas Morning News , “ In this environment, there is a great opportunity to start small, build slowly and, as the economy hopefully gets better, accelerate your growth.” He recently launched his “ Mark Cuban Stimulus Plan ...

I like Entrepreneur magazine and I especially like Guy Kawasaki's column which I have mentioned here before. If you are a dabbler like myself, you will appreciate his succinct and friendly style. I am so behind in my reading that I was reading an older column and then a more recent one came to my attention, so they are both listed here: Garnering Angels "Sure, you may have ventured for VC, but raising angel capital takes a different kind of skill." By Guy Kawasaki Entrepreneur Magazine - January 2008 Explains about angel investors - what motivates them and how seeking an angel is different from looking for venture capital. Another angel investor article on Entrepreneur's site, focuses in particular on an angel network that helps women-owned businesses. Send me an Angel Can you get angel funding to expand your company? By Aliza Sherman Entrepreneur Magazine - October 2007

I've posted about web-based directories for angel investors before, but here's yet another site that your clients can use. This one focuses squarely on angel groups by region within New York State, so it's right up our alley: "Angel investor groups across New York State" http://bianys.com/node/76 (Thanks [again] to the Business Incubator Association of NYS for pointing this out to me.)