Angel Investors Illinois

Frequently Asked Questions

Q1. What do angel investors want to see?

Entrepreneurs looking to expand their business often aim to raise venture capital in order to get their hands on much needed venture funds they must give Angel investors the following:

a. A compelling reason to invest - Angel investors in Illinois can either be an economic, self indulgent or an altruistic investor. If you are an entrepreneur looking for venture funding then you must find out what drives a particular investment network or portfolio companies to support startups. If they are self indulgent, they normally prefer to give venture funds to a new startup that is exciting or new. If they are altruistic, an Illinois angel investor might be looking for startups that help solve a community problem. An economic investor however, is interested in a wide range of industries as they are more concerned about growing their investment portfolios much like an investment banker. They also like to take more active roles in a particular company so the range of industries these types of investors go for is really varied.

b. A reliable and strong management team - Illinois angel investors often give equity funding to a management team that truly delivers. Startups that get an angel investment to help them expand their business have expertise in different aspects of the business such as in marketing, sales, human resources, research and development and many more. They must be competent and reliable.

c. A concrete business plan - When making business proposals for Illinois angels, entrepreneurs must create one that is complete with financial projections and extensive market plans that clearly establishes the company’s target market and competitive advantage. The said business plan must also detail how the startup plans to remain competitive in the midst of competition and in the midst of a constantly changing marketing landscape.

d. A company with a clear investment structure - privately held wealth is often invested in a range of industries that yield profitable returns. Financing privately however still remains a calculated risk, that is why if you are looking for angel investors your company must define an equity investment option where angel investors can truly acquire an equity ownership option. There must be legal shareholder agreements that clearly state contingencies for angel investors and their angel investments.

e. An opportunity for involvement - While most angel investors want to remain as a silent partner, development stage companies might need more guidance in the earlier stages of business development. Angel investors sometimes like to get involved in day-to-day operations so they can in turn ensure returns to their investments.

f. An exit strategy - Angel investors especially Angel investors in Illinois expect a broad risk analysis for all their investments and viable exit strategies. Though angel investment is generally risky, most angel investors want to know how they will be getting the returns to their investments and in what way they can safely get back their investments in case a company fails.

Q2. How do I find Angel investors?

If you are an entrepreneur in North America on an investor search for Illinois angel investors, then Funded.com is definitely the place for you. We connect business owners and investors and help them realize their financial goals. Entrepreneurs based in Illinois or Central Illinois can register through the website and find venture funding from our investment network so they can soon be venture partners. Our website has an A+ rating at the Better Business Bureau so all our angel investors in Illinois or Chicago IL are accredited. What’s more, we’ve been in the business of connecting business owners to secure venture funds from an angel investment organization for more than 12 years now. Accredited Illinois angel investors can also join the roster of our investment network and help seed the next best idea by becoming capital partners with a business startup. Investor searches can truly be overwhelming. So if you are on a look out for a venture partner, do your due diligence and visit our website now.

Q3. What percentage do angel investors take?

Angel investors expect to own at least a 20-50% stake in business startups they help finance. When fund raising through angel investments, most of the time ownership percentage can be defined through negotiations. Most of the time however, in financing private companies, angel investors usually assess a company’s value and determine their percentage of ownership from there. For companies involved in real estate developments where assets to be acquired entails huge capital funding, higher returns are expected.

Q4. How do you negotiate with angel investors?

Negotiating with angel investors can be tricky. The goal must be to get them genuinely interested. Remember, profitable partnerships begin with sharing a mutual goal. Angel investors must be enticed by the most fascinating aspects of the company instead of getting bored with business plans and financial projections. Once you win them over with what your company is for, then you can go for business terms and details of how investing with you can be profitable for them.

Q5. Why do angel investors invest in startups?

According to different sources, diversification of portfolio companies and improvement of investment networks are the main reasons why angel investors are interested in investing in startups. Despite entering into a very risky deal, angel investors also perceive this action as a very rewarding course if successful and would appreciate the fact that they are the primary source of funding that the business can rely on. On the other hand, there are angel investors that simply want to improve their investment profile or take part in unveiling new technologies, new business setups, and up-to-date ideas that could range from real estate up to the field of insurance companies. Whatever their goal is, it is important to understand the motivation behind these angel investors in order for a business owner to be able to convince them to come on board. Once you understand the styles and strategies of these angel investors pitching your business ideas to them will be easy.

Q6. How do I convince an investor to invest in my startup?

Angel investors will not waste their wealth and their money on ideas that do not appeal to them. While most of them especially angel investors in Illinois are used to taking huge risks, most of them will ignore you if they do not see how serious you are in building up your business. When presenting a business proposal to potential angel investors, you must have all your facts and numbers on hand. If for example you are into real estate development and are looking for a real estate investment, then you must have your market research ready. You must also know details about the behaviors of your target angel investors and study how and when they typically invest. Numbers matter in order to get ahead in securing venture funding. Angel investment is usually also an emotional investment. Angel investors buy into stories that sell. If you want to convince one to come on board they must believe in the story you are trying to tell. Pitch to them how your story will help solve problems of your target market. Your business plan must detail all your business strategies that will help you stay competitive. It must also explain how an angel investor’s private equity will grow by helping finance your business. In doing that, it will also be helpful if you have a clearly defined revenue model. After all, at the end of the day investment is still a numbers game. A viable revenue model that clearly states how much profits are at stake will convince angel investors to invest in your business. Lastly, it is all about the presentation. Think of ways for you to stand out. Be very genuine in your intent and in selling your ideas.