Raising Business Angel Investment: Fill & Download for Free

Despite all of the stories you read on the blogs, and the conventional wisdom you might hear in startup circles, the cold, hard fact is that you are highly, highly unlikely to find angel investors willing to fund your 'sketched out' ideas to help you build a prototype. It has become increasingly easy to get through the prototype stage for very little money, and therefore the bar these days is set much higher than simply a business plan or a 'fully sketched out idea'. Statistics show that fewer than 2.5% of entrepreneurs seeking funding from angels actually get it, so therefore you are competing for an investment with other startups that are coming to the same table with existing prototypes, finished products, or even fully operating companies, which makes them (in the eyes of investors) a somewhat safer investment for the same high potential return than your concept-only company.To give you just one example, a couple of years ago New York Angels funded $500,000 into Pond5.com. It is a site that brings together producers and consumers of royalty-free, video stock footage. When we invested, the company had a full management team (tech, sales, product/business), a completed product that was better than any competitor's, and was already generating revenue. The total amount of cash that it had taken them to get to that point? Less than $20,000. Today, with no further investment, the company is profitable, is on a hockey-stick growth curve, and is the world's largest royalty-free stock media marketplace.I would therefore strongly suggest that the best thing you can do to get yourself funded is to get started building your company, any way you can. If you can bootstrap it from revenues, superb! If you can get team members to join you for equity, wonderful. If you can fund it out of your pocket, do so. If you have to go to friends and family, and can convince them to back you, go for it. But the harsh realities are that the odds are strongly against you being able to get angel funding at this stage.That being said, if you still think you are the exception and might have a chance at angel funding, you can certainly test the theory. Go to https://gust.com/find-investors and use the free search engine to find one or more angel groups in your area (either physically or industry). You can then apply to them for funding, and see what they say. Best case, you'll be invited in to pitch; otherwise, at least you'll get some feedback.

London Business AngelsAngel Investment NetworkAngels DenQ-VenturesEtonpreneurs

You don't have a choice.Business angels and venture funds are not alternative options for the same result. It's like asking "should I drive a school bus or a Formula One racing car?" Depending on your situation (taking 40 children to kindergarten, competing in the 24 hours of Le Mans, or transporting 75,000 pounds of equipment across an ice road), one or the other or neither might be possible, but not both.Angel investors are typically the first outside capital a company raises, in the amount of tens or hundreds of thousands of dollars. Venture capital investors typically invest in companies at a later stage, in the amount of millions or tens of millions of dollars.If you are at a stage where you will be able to find a business angel investor, you are highly unlikely to be of any interest to a VC. And if you are in a position to get a term sheet from a VC, it is highly unlikely that an angel will be interested/able to be competitive.In both cases, the funding is not 'as of right.' Instead, it is highly competive: angels typically invest in one out of every 40 companies who approach them; venture capital funds in one out of 400.