If you are a growing business with the next terrific product, occasionally you'll need an angel on your side.
A report by the University of New Hampshire's Center for Venture Research showed that "angel investors" - high-net-worth individuals willing to invest in entrepreneurial companies at an early stage - spent over $18 billion into early-stage firms last year alone, in comparison with $304 million by venture capitalists.
Locating an angel investor, on the other hand, just isn't an easy task. Safer Smokes Incorporated is one company that understands the challenge of attracting the appropriate investors.
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This development-stage business is tapping the tobacco industry with a special tobacco-free, nicotine-free smoke referred to as Bravo, which has the look of a regular cigarette and burns like tobacco, but is actually made from lettuce fibers.
"Bravo lets you smoke your way out of the tobacco addiction slowly and gradually," said Puzant C. Torigian, CEO of Safer Smokes.
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For businesses like Safer Smokes, it might be too soon to approach huge venture capital firms, but time to move past networking with family and friends. Private investors to the rescue!
"The challenge for raising money in the present market is in harnessing the strength and vision of the angel to see through to the actual investment opportunity," stated Torigian.
If you work for or own your own company going public that's looking for an Angel Investor, you may need a bit of restructure management help. Most companies restructuring enlist the aid of investment consultants just before making any significant company modifications. You should do the same.
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So how do businesses like Safer Smokes attract their angel?
* Have a very clear target market for your product or service. For instance, Safer Smokes is targeting the tobacco industry, which has sales nearing $10 billion a year, up from $6 billion just 3 years ago.
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Most private investors prefer companies that are likely to show positive cash flow within their first eighteen months, so having these types of statistics about your industry could be an incentive.
* Match your business strategy objectives to the angel's risk tolerance. Investors need to know the product or service will be unique and well-cultivated. Safer Smokes has a patented remedy that company officials say will "affect the conditions of our health care industry."
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