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I have a profitable business that I’ve funded so far on my own. I’ve heard you talk about seeking funding from wealthy individuals. I don’t ever cross paths with wealthy people. So how does someone like me get in front of potential investors who will give me a chance?

I get it! You feel like you are an outsider.

Yes, it is possible to raise money from individuals who share your profit goals and innovative spirit. In fact, more restaurants, film projects, tech businesses, Internet serve companies and game changing innovators get their startup funds from wealthy individuals, often called "angel investors," than big-name venture capital funds.

Unlike venture capital fund managers (called “VCs”), angels can be gutsy, fast decision makers because they invest their own savings. In contrast, VCs invest other people’s money and can lose their salaried positions if they make too many investment mistakes. As such, most VCs play it safe and sit on the sidelines until a company has developed enough traction with customers or product development. This is especially true for businesses that are managed by first-time entrepreneurs.

So what’s the fastest way to find check writing angels? Here are some ideas.

  • Angel clubs.

    Today there are several hundred angel organizations which bring together wealthy individuals to invest in promising companies. The primary advantage of these clubs to entrepreneurs is the time-saving opportunity to present to dozens of potential investors at a single club meeting. Click here to get a free list of angel clubs in your state.
  • “Shared purpose” angels.

    Proving the value of a startup enterprise is always easier when entrepreneurs can appeal to angels who have an appreciation for the innovative value of a new product or service. If, for example, you have an idea for a new toothbrush, then wealthy dentists may be a target for angel funding. These investors may also help you identify first customers, distribution partners and industry publicity too.
  • Retired executives.

    Whenever you read about esteemed executives who leave corporations to explore other career opportunities, take note. Today, retired executives are not necessarily ready to retire from all business activities. Angel investing gives older executives a way to participate in new enterprising initiatives without all the day-to-day work responsibilities.
  • Successful entrepreneurs.

    CEOs and founders of highly successful entrepreneurial companies are prime hunting ground for angel investments, especially if their companies have been bought out by another company or gone public. Either way, they may have extra cash to spend. Pay attention to your regional business press
  • Incubators.

    Incubators, business accelerators and technology clusters are buzz words for entities that provide business management advisory services, office space and sometimes easy access to local angel investors.

The real deal is active angel investors overwhelmingly prefer to fund local entrepreneurs, not entrepreneurs who live across the country. Angels value personal relationships and the good will recognition of being supportive of entrepreneurial organizations within their own community. For this reason, I coach entrepreneurs to pitch wealthy people within a 350 mile radius in densely populated regions; 400 mile radius in more rural regions.

Over 50,000 entrepreneurs proved last year that it is possible to raise money from angel investors. The secret to their success was they didn’t stop asking good questions and they didn’t stop asking for money until their bank accounts were flush with cash. You can do it too!

Do you have a question for Susan? or connect through Twitter @startonpurpose

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