Attracting Capital from Angels

• What are angels and what do they want?
• Different types of angels
• Pitching and preparing for angels
• Finding angels
• Working with angels
• The future of angel investing

Attracting Capital from Angels is the ultimate guide to finding the money your business needs to get on its feet-and make a run at success.

Angels are a particularly rare breed of investor. Whereas venture capital firms and funds invest other people's money in new businesses, angel investors invest their own money. Willing to take great risks, they are the start-up entrepreneur's best friends. Attracting Capital from Angels offers an in-depth look at the white knights of the entrepreneurial world.

Angels most often assist a company when it may be little more than an entrepreneur's dream. Frequently, they offer more than money: serving as coach, mentor, and champion, and often providing guidance from the point of view of one who has experience turning ideas into fortunes.

This book is the product of fifteen years working with, observing, and listening to entrepreneurs and angel investors as they pursued the entrepreneurial dream. It features top-notch research supplemented by in-depth interviews with angel investors and entrepreneurs. The personal stories presented here will help you learn from the mistakes of other entrepreneurs and model your approach on their successes.

From the entrepreneur's point of view, gaining an understanding of the angel as an individual is an important factor in determining whether the partnership will be successful. As such, this book provides an inside look at angel investors and a comprehensive understanding of the "how" and the "why" of what they do. It provides guidance on finding the right angels, avoiding the wrong ones, and making a business work after an angel buys into it.

Topics include:

• Angel investors versus venture capitalists
• How angels identify promising investments
• Selling a business plan to an angel investor
• Spotting frauds and cheats
• The importance of obtaining sound legal advice
• Attracting angels to your business
• Angels' approach to valuation
• Working with an angel after closing the deal

Finding capital for your company is one of the most difficult and important tasks an entrepreneur must undertake, and Brian Hill and Dee Power will help you do it right. Both a practical "how-to" book and an authoritative resource on angel investors, Attracting Capital from Angels will tell you everything you need to know to find your own divine source of capital.

Contents

Foreword

What Is an Angel and What Do Angels Want?

Ch. 1 The Fascinating World of Angel Investors 3
Ch. 2 Trends in Angel Investing 13
Ch. 3 What Is an Angel Investor? 24
Ch. 4 Why Do People Want to Be Angels? 33
Ch. 5 The Challenges of Being an Angel 41
Ch. 6 Angels Compared to Venture Capitalists 49
Ch. 7 What Do Angels Want? 61
Ch. 8 Entrepreneur Characteristics That Attract Angels 75

Types of Angels

Ch. 9 The Many, Many Types of Angels 85
Ch. 10 When Angles and Venture Capitalists Are on the Same Team 100
Ch. 11 Devil in a Blue Suit: Spotting Frauds and Cheats 105

Preparing for a Glimpse of Heaven

Ch. 12 Why an Attorney Is an Absolute Must 115
Ch. 13 Putting Together Your Advisory Board 123
Ch. 14 The Poor, Misunderstood Business Plan 133
Ch. 15 The All-Important Marketing Plan 142
Ch. 16 Do Angels Put Any Credence in Business Plans? 148
Ch. 17 Polishing Your Pitch 161

Finding and Angel

Ch. 18 How Do Angels Find the Deals? 171
Ch. 19 Why Do Angles Band Together? 178
Ch. 20 Behind Closed Doors 189
Ch. 21 Tracking the Flight Path of Angels Is Difficult: They Don't Show Up on Radar 200
Ch. 22 Making It Easy for an Angel to Find You 211

You've Found an Angel - Now What?

Ch. 23 To Invest or Not to Invest: That Is the Question 221
Ch. 24 The Mystery of Valuation 236
Ch. 25 Coming to Terms 247
Ch. 26 Entrepreneurs Who Attracted Angels to Their Company 255

Living with an Angel

Ch. 27 Advantages of an Angel Investing in a Company 263
Ch. 28 Working with an Angel after the Close 273
Ch. 29 Tales from the Venture Vault 284

The Future of Angel Investing

Ch. 30 Making the Angel Investment Market More Efficient 293
Ch. 31 Outlook: What a Wonderful World It Could Be 304

App Experts Who Contributed to Attracting Capital from Angels 314

Index