Angel investors|This was a question recently received from one of our many readers in South Africa who asked if angel investors really do exist and if so how do you find them.
To answer the question directly – yes angel investors certainly do exist and can be found in virtually every country. The second part of the question of how to find them is perhaps a little more complex.

Entrepreneurs and business owners who are translating business ideas into new ventures invariably look for either seed capital to get started or for their first round of external financing once they have used their own funding to launch their venture. Entrepreneurs also report that the response they get from their bank as a new business/ start-up is often not very favourable and so they have to look in other directions.

As with most investment situations there are pluses and minuses. With angel investors on the plus side obviously the infusion of new working capital is a definite asset. On the minus side might be that the investor is looking for a very substantial part of the business and the entrepreneur finds himself or herself in a minority ownership position. While this may be an extreme situation it is always important to make sure that any offer from an angel investor is thoroughly investigated and reviewed prior to signing an agreement.

Angel investors normally are located through a network marketing approach, as the old saying goes it’s not necessarily what you know but ‘who you know’ that counts and this may well be true when looking for an angel investor.

We recently had a question from a reader about the value of network marketing as it pertained to sales and we were able to respond in a positive manner and the same also applies here when looking for the ideal investor. Network marketing as we have said in the past is an effective and professional approach that normally does not have a great impact on cash flow.

The secondary finance market certainly contains angel investor options and possibly many other opportunities that entrepreneurs have not explored. Information is a valuable commodity and all business owners whether they are just starting a business or have a mature organization need to continually build the information base. We offer an excellent resource in this area through our publications which can be found at stainbooks.com remember that information is a very valuable commodity. Build your information base through networking and for specific ideas on that please refer to our blog post on that topic.