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Business Plan Template for Angel Investors

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Looking to secure funding from angel investors for your brilliant business idea? Look no further than ClickUp's Business Plan Template for Angel Investors! This template is specifically designed to help entrepreneurs like you outline your company's vision, market opportunity, financial projections, and growth strategy in a clear and compelling way. With this template, you can create a comprehensive and professional business plan that will attract potential angel investors and give you the best chance of securing the funding you need to bring your vision to life. Don't miss out on this opportunity to take your business to the next level—get started with ClickUp's Business Plan Template today!

Business Plan Template for Angel Investors Benefits

When using the Business Plan Template for Angel Investors, entrepreneurs can enjoy a range of benefits that will help them secure the funding they need:

• Streamline the pitching process by providing a clear and concise overview of your business
• Showcase your company's vision, demonstrating your passion and commitment to potential investors
• Present a compelling market opportunity, highlighting the potential for growth and profitability
• Provide detailed financial projections, giving investors confidence in the potential return on their investment
• Outline a strategic growth plan, showing investors how you plan to scale and achieve success
• Increase your chances of securing funding from angel investors and turning your entrepreneurial dreams into a reality.

Main Elements of Angel Investors Business Plan Template

When it comes to attracting angel investors and securing funding for your business, having a well-structured and comprehensive business plan is crucial. ClickUp’s Business Plan Template for Angel Investors includes:

• Custom Statuses: Keep track of the progress of each section of your business plan with statuses like Complete, In Progress, Needs Revision, and To Do.
• Custom Fields: Add important details to your business plan, such as references, approval status, and section classification, using custom fields like Reference, Approved, and Section.
• Custom Views: Access different perspectives of your business plan with views like Topics, Status, Timeline, Business Plan, and Getting Started Guide, making it easy to navigate and share your plan with potential investors.
• Collaboration Tools: Collaborate with your team in real-time, assign tasks, set due dates, and leave comments to ensure everyone is aligned and working towards the same goal.
• Document Management: Use ClickUp’s Docs feature to write and store your business plan, making it easy to update and share with investors.

How To Use Business Plan Template for Angel Investors

If you're seeking investment from angel investors, having a well-crafted business plan is crucial. Follow these steps to effectively use the Business Plan Template for Angel Investors in ClickUp:

1. Define your business concept

Start by clearly articulating your business concept and value proposition. Explain what problem your product or service solves, who your target market is, and how your offering is unique. This section should provide a clear understanding of your business and its potential for success.

Use the Docs feature in ClickUp to outline your business concept and value proposition in detail.

2. Conduct market research

Angel investors want to see that you've thoroughly researched your target market and industry. Identify your target audience, analyze your competition, and assess market trends. Provide data-backed insights that demonstrate a solid understanding of the market landscape.

Use the Table view in ClickUp to organize and analyze your market research data effectively.

3. Develop a comprehensive financial plan

Include a detailed financial plan that outlines your revenue projections, expenses, and funding requirements. Show how you plan to monetize your business and achieve profitability. It's also essential to highlight your assumptions and provide a clear roadmap for financial growth.

Create custom fields in ClickUp to track your financial projections and milestones.

4. Showcase your team and expertise

Angel investors are not just investing in your business idea; they are also investing in you and your team. Highlight the qualifications and experience of your key team members, emphasizing how their skills align with the needs of your business. Include any advisors or mentors who can provide additional credibility.

Use the Dashboards feature in ClickUp to showcase your team's expertise and track their contributions.

5. Craft a compelling executive summary

The executive summary is the first section investors will read, so it needs to be attention-grabbing and concise. Summarize the key points of your business plan, highlighting the most compelling aspects. Make sure to include crucial details such as your unique selling proposition, financial projections, and funding requirements.

Create an Email in ClickUp to send your executive summary to potential angel investors, making a strong first impression.

By following these steps and leveraging the Business Plan Template for Angel Investors in ClickUp, you'll be well on your way to attracting the attention and investment you need to turn your business dreams into a reality.

Get Started with ClickUp’s Business Plan Template for Angel Investors

Entrepreneurs seeking investment from angel investors can use the ClickUp Business Plan Template to create a comprehensive and compelling business plan that highlights their company's potential.

First, hit "Add Template" to sign up for ClickUp and add the template to your Workspace. Make sure you designate which Space or location in your Workspace you’d like this template applied.

Next, invite relevant members or guests to your Workspace to start collaborating.

Now you can take advantage of the full potential of this template to create an impressive business plan:

• Use the Topics View to organize your business plan into different sections, such as Executive Summary, Market Analysis, Financial Projections, and Growth Strategy.
• The Status View will help you track the progress of each section, with statuses like Complete, In Progress, Needs Revision, and To Do.
• Utilize the Timeline View to set deadlines and milestones for each section, ensuring that you stay on track.
• The Business Plan View provides a comprehensive overview of your entire plan, allowing you to review and make necessary adjustments.
• Use the Getting Started Guide View to access helpful tips and resources to assist you in creating a successful business plan.
• Customize the Reference, Approved, and Section custom fields to add additional information and track important details.
• Collaborate with team members and stakeholders to gather feedback and make revisions to your business plan.
• Monitor and analyze your progress to ensure that your business plan is compelling and ready to attract angel investors.
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• Write Your Business Plan | Part 1 Overview Video
• The Basics of Writing a Business Plan
• How to Use Your Business Plan Most Effectively
• 12 Reasons You Need a Business Plan
• The Main Objectives of a Business Plan
• What to Include and Not Include in a Successful Business Plan
• The Top 4 Types of Business Plans
• A Step-by-Step Guide to Presenting Your Business Plan in 10 Slides
• 6 Tips for Making a Winning Business Presentation
• 3 Key Things You Need to Know About Financing Your Business
• 12 Ways to Set Realistic Business Goals and Objectives
• How to Perfectly Pitch Your Business Plan in 10 Minutes
• Write Your Business Plan | Part 2 Overview Video
• How to Fund Your Business Through Friends and Family Loans and Crowdsourcing
• How to Fund Your Business Using Banks and Credit Unions
• How to Fund Your Business With an SBA Loan
• How to Fund Your Business With Bonds and Indirect Funding Sources
• How to Fund Your Business With Venture Capital
• How to Fund Your Business With Angel Investors
• How to Use Your Business Plan to Track Performance
• How to Make Your Business Plan Attractive to Prospective Partners
• Is This Idea Going to Work? How to Assess the Potential of Your Business.
• When to Update Your Business Plan
• Write Your Business Plan | Part 3 Overview Video
• How to Write the Management Team Section to Your Business Plan
• How to Create a Strategic Hiring Plan
• How to Write a Business Plan Executive Summary That Sells Your Idea
• How to Build a Team of Outside Experts for Your Business
• Use This Worksheet to Write a Product Description That Sells
• What Is Your Unique Selling Proposition? Use This Worksheet to Find Your Greatest Strength.
• How to Raise Money With Your Business Plan
• Customers and Investors Don't Want Products. They Want Solutions.
• Write Your Business Plan | Part 4 Overview Video
• 5 Essential Elements of Your Industry Trends Plan
• How to Identify and Research Your Competition
• Who Is Your Ideal Customer? 4 Questions to Ask Yourself.
• How to Identify Market Trends in Your Business Plan
• How to Define Your Product and Set Your Prices
• How to Determine the Barriers to Entry for Your Business
• How to Get Customers in Your Store and Drive Traffic to Your Website
• How to Effectively Promote Your Business to Customers and Investors
• Write Your Business Plan | Part 5 Overview Video
• What Equipment and Facilities to Include in Your Business Plan
• How to Write an Income Statement for Your Business Plan
• How to Make a Balance Sheet
• How to Make a Cash Flow Statement
• How to Use Financial Ratios to Understand the Health of Your Business
• How to Write an Operations Plan for Retail and Sales Businesses
• How to Make Realistic Financial Forecasts
• How to Write an Operations Plan for Manufacturers
• What Technology Needs to Include In Your Business Plan
• How to List Personnel and Materials in Your Business Plan
• The Role of Franchising
• The Best Ways to Follow Up on a Buisiness Plan
• The Best Books, Sites, Trade Associations and Resources to Get Your Business Funded and Running
• How to Hire the Right Business Plan Consultant
• Business Plan Lingo and Resources All Entrepreneurs Should Know
• How to Write a Letter of Introduction
• What To Put on the Cover Page of a Business Plan
• How to Format Your Business Plan
• 6 Steps to Getting Your Business Plan In Front of Investors

How to Fund Your Business With Angel Investors Angel investors are individuals who use their own money to back entrepreneurs they believe in.

By Eric Butow Edited by Dan Bova Oct 27, 2023

Key Takeaways

• Angel investors invest their own money.
• Angel investors tend to have a people-first philosophy when choosing which businesses to back.
• There are many digital networks that connect entrepreneurs with angels.
• Angels tend to start with small investments and add as they see progress.

Opinions expressed by Entrepreneur contributors are their own.

This is part 7 / 11 of Write Your Business Plan: Section 2: Putting Your Business Plan to Work series.

If you are having trouble getting funding for your venture under the right terms, or under any terms at all, you'll be glad to know about the existence of angels in the investment world. Angels are individuals who invest their own money, as opposed to institutions or professional money managers, who invest other people's money. Many angels are well-off professionals, such as doctors and lawyers. Some are retired but have tremendous expertise to share in a specific field. Others are successful small business owners who have made a bundle with their own entrepreneurial efforts and are now interested in letting their money work for them in someone else's venture.

Because angels invest their own money, you might think they are the most discriminating, difficult-to-please investors. In fact, they are as a rule much more willing to take a flier on a risky, unproven idea than are professional investors and lenders.

Related: 6 Ways Angels and VCs Think Differently

That's not to say that they won't do their due diligence, but angels often take a personal interest in a project and may simply believe strongly in the person behind it…that's you! They are usually swayed more by personal concerns than by financial ones.

Note: [Due diligence refers to all the things an investor should do to check out an investment. It has a legal definition when applied to the responsibilities of financial professionals, such as stockbrokers. In general, it includes such things as requiring audited financial statements and checking warehouses for claimed inventory stocks.]

Finding Angel Investors

While angel investors used to be located primarily by word of mouth, they are easier to find in the electronic age. The Angel Investment Network helps angel investors and small businesses seeking capital meet online.

The Angel Capital Association is another place to learn about angels and seek out an angel network—a local group of angel investors in your area. Visit them at www.angelcapitalassociation.org .

Keep in mind that angels are, above all else, unconventional. Many have little training in evaluating business ideas. If twenty angels turn you down, it doesn't mean a thing. Until you've gone through the last name in your Rolodex, you still have a chance of landing an angel backer.

Related: 7 Important Differences Between Angels And VCs You Need To Know

Tim Berry describes the path to finding the right angel in his article " How to Land Funding From Angel Investors ," writing:

Consider Harold Lacy's "six degrees of separation" method. Your angel might be somebody you know, recommended by somebody you know, or a local investment club, business person, perhaps even a local development agency.

Angel investors often focus on local markets, specific industries, and affinities such as college or university alumni. Your search should include looking for angel groups related to the college or university from which you graduated; your town, or state; and the industry you're in.

Use web search. Search for "angel investors in [your area]" or "angel investors [your type of business]" or "angel investors [your college or university] alumni."

Related: Glamour of VC Funding VS Patronage Of Angel Nurturing

What Angels Investors Are Looking For

You may also fit angel guidelines if you don't need a whole lot of money. Institutional venture capitalists can, by pooling the funds of several different groups, raise vast sums. It's not unheard of for venture capitalists to invest nine-figure sums—more than $100 million—in relatively new, unproven ventures. Even Bill Gates or Warren Buffett is unlikely to feel comfortable sinking that kind of money into anything uncertain. Your angels' capacity will vary, of course, but angels tend to start small and see how you are doing before adding to the pot. One of the nicest things about the angel networks that have formed in recent years is that they can pool their resources, giving you a few angel investors in one place at one time. This also makes it easier when you are preparing to meet with angel investors. Rather than meeting one at a time, you can meet several in one angel network or even a couple who will spread the word among their partners so that they can decide as a group.

Related: 3 Things That Make Angel Investors Want To Invest In You

If you're after angels, it's in your interest to guard their interests. Unsophisticated angels may, for instance, give you money without specifying exactly what they are buying, such as percentage of ownership. Such angels can be taken advantage of. But you may want more help someday, and angels tend to talk with each other. So make it legal, make terms clear, and take care of their interests.

Related: Where To Find Angel Investors

More in Write Your Business Plan

Section 1: the foundation of a business plan, section 2: putting your business plan to work, section 3: selling your product and team, section 4: marketing your business plan, section 5: organizing operations and finances, section 6: getting your business plan to investors.

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How to Write a Convincing Business Plan for Investors

Noah Parsons

9 min. read

Updated May 10, 2024

Raising money for your business is a major effort. You need lists of investors to reach out to and you need to be prepared for your investor meetings to increase your chances of getting funded . You need to practice your pitch and be ready to intelligently answer any number of questions about your business. A key to making this entire process much easier is to invest a little time and write a business plan . It’s true — not all investors will ask to see your business plan. But the process of putting together a business plan will ensure that you’ve thought through every aspect of your business and you’re ready to answer any questions that come up during the fundraising process.

• Why do investors want to see a business plan?

The business plan document itself isn’t what’s important to investors. It’s the knowledge that you’ve generated by going through the process that’s important. Having a business plan shows that you’ve done the homework of thinking through how your business will work and what goals you’re trying to achieve.

When you put together a business plan, you have to spend time thinking about things like your target market , your sales, and marketing strategy , the problem you solve for your customers, and who your key competitors are . A business plan provides the structure for thinking through these things and documents your answers so you’re prepared for the inevitable questions investors will ask about your business. 

Even if investors never ask to see your business plan, the work you’ve done to prepare it will ensure that you can intelligently answer the questions you’ll get. And, if an investor does ask for your business plan, then you’re prepared and ready to hand it over. After all, nothing could be worse than arriving at an investor meeting and then getting a request for a business plan and not having one ready.

Beyond understanding your business strategy, investors will also want to understand your financial forecasts. They want to know how your business will function from a financial standpoint — what is typically called your “ business model .” They’ll also want to know what it will take for your business to be profitable and where you anticipate spending money to grow the business. A complete financial plan is part of any business plan, so investing a little time here will serve you well. 

• What do investors want to see in a business plan?

There’s no such thing as a perfect business plan and investors know this. After all, they’ve spent years, and often decades, hearing business pitches, reading business plans, investing in companies, and watching them both succeed and fail. As entrepreneur and investor Steve Blank likes to say, “No business plan survives first contact with a customer.” 

If this is true, then why bother writing a business plan at all? What’s the value of planning and why do investors want them if they know the plan will shortly be outdated?

The secret is that it’s the planning process, not the final plan, that’s valuable. Investors want to know that you’ve thought about your idea, documented your assumptions, and are on track to validate those assumptions so that you can remove risk from your business. 

So what do investors want to see in your business plan? Beyond the typical sections , here are the most important things that investors want to see in your plan.

A vision for the future

Investors, particularly those investing in early-stage startups, want to understand your vision . Where do you see your company going in the future? Who will your customers be and what problems will you solve for them? Your vision may take years to execute — and it’s likely that the vision will change and evolve over time — but investors want to know that you’re thinking beyond tomorrow and into the future.

Product/market fit and traction

Investors want more than just an idea. They want evidence that you are solving a problem for customers. Your customers have to want what you are selling for you to build a successful business and your business plan needs to describe the evidence that you’ve found that proves that you’ll be able to sell your products and services to customers. If you have “traction” in the form of early sales and customers, that’s even better.

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Funding needed and use of funds

When you’re pitching investors, you need to know how much you’re asking for. Your financial forecast should help you figure this out. You’ll want to raise enough money to cover planned expenses and cash flow requirements plus some additional funding as a safety net. In addition, you’ll want to specify exactly how you plan on using your investment . In a business plan, this section is often called “sources and uses of investment.”

A strong management team

A good idea is really only a small part of the equation for a successful business. In fact, lots of people have good business ideas — it’s the people that can execute well that generally succeed. Investors will pay a lot of attention to the section of your plan where you talk about your management team because they want to know that you can transform your idea into a successful business. If you have gaps and still need to hire key employees, that’s OK. Communicating that you understand what your needs are is the most important thing.

An exit strategy

When investors give you money to start and grow your business, they are looking to eventually make a return on their investment. This could happen by eventually selling your business to a larger company or even by going public. One way or another, investors will want to know your thoughts about an eventual exit strategy for your business.

• What documents do investors want to see?

Even if investors never ask for a detailed business plan, your business planning process should produce a few key documents that investors will want to see. Here’s what you need to be prepared to pitch investors:

Cover letter

These days, a lot of fundraising outreach is done over email and you’ll need a concise cover letter that sparks investor interest. Your cover letter needs to be very brief, but describe the problem you’re solving for your target market.

Great cover letters are sometimes in a “story” format that hooks readers with a real-world, relatable example of the problems your customers face and how our product or service The goal of the cover letter isn’t to explain every aspect of your business. It’s just to spark interest and get a meeting with an investor where you’ll have more time to actually pitch your business. Keep your cover letter brief, engaging, and to the point.

If you get an investor meeting, you’ll almost certainly need a pitch deck to present your idea in more detail and showcase your business idea. Your pitch deck will cover the problem you’re solving, your solution, your target market, and key market trends.

Further Reading: What to include in your pitch deck

Executive summary and/or one-page plan

You might not get a meeting right away. Your cover letter may generate a request for additional information and this is where a solid executive summary or one-page business plan comes in handy. This document, while still short, is more detailed than your cover letter and explains a bit more about your business in a page or two.

Read more about what goes into a great executive summary and how to build a lone-page business plan.

Financial forecasts

Investors will inevitably want to see your financial forecasts. You’ll need a sales forecast, expense budget , cash flow forecast , profit and loss, and balance sheet . If you have historical results, you should plan on sharing those too as well as any other key metrics about your business. Investors will always look deep under the hood of your business, so be prepared to share all the details of how your business will work from a financial perspective.

• What to include in your investor business plan

When you put together a detailed business plan for investors, you’ll follow a fairly standard format. Of course, feel free to customize your plan to fit your business needs. Remember: your business plan isn’t about the plan document that you create — it’s about the planning process that helps you think through and develop your business strategy. Here’s what most investor business plans will include:

Executive Summary

Usually written last, your executive summary is an overview of your business. As I mentioned earlier, you might use the executive summary as a stand-alone document to provide investors more detail about your business in a concise form. Read our guide on executive summaries here .

Opportunity

The opportunity section of your plan covers the problem you are solving, what your solution is, and highlights any data you have to prove that people will spend money on what you’re offering. If you have customer validation in any form, this is where you highlight that information.

Market Analysis

Describe what your target market is and key trends that are occurring in this market . Is the market growing? Are buying patterns changing? How is your business positioned to take advantage of these changes? Be sure to spend some time discussing your competition and how your target market solves their problems today and how your solution is superior.

Marketing & Sales Plan 

Most businesses need to figure out how to get the word out and attract customers. Your business plan should include a marketing plan that describes how you’re going to reach your target market and any key marketing initiatives that you’re going to undertake. You should also spend time describing your sales plan, especially if your sales process takes time to close customers.

Milestones / Roadmap

Outline key milestones you hope to achieve and when you plan on achieving them. This section should cover key dates for product development, key partnerships you need to create, and any other important goals you plan on achieving.

Company & Management

Here’s where you describe the nuts and bolts of your business. How is your organization structured? Who is on your team and what are their backgrounds? Are there any important positions that you still need to recruit for?

Financial Plan

As I mentioned, you’ll need to create a profit and loss, cash flow, and balance sheet forecast. Your financial plan should be optimistic, yet realistic. This is a tough balance and your forecast is certain to be wrong, but you need to document your assumptions and plans for the business.

Finally, you can include an appendix for any key additional information you want to share. Product diagrams, additional details on how you deliver your service, or additional research can all be included.

• What comes next?

Writing a business plan for investors is really about preparing you to pitch your business . It’s quite likely that you’ll never get asked for the actual business plan document. But, the process will prepare you better than anything else to answer any questions investors may have.

Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

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How To Get Angel Investors To Fund Your Business Idea

You are going to change the world with your incredible new business idea. You have drawn all the plans in your head, conducted all the market research, and are sure of an industry takeover. The only thing holding you back is funding. One viable option to secure this is through an angel investor business plan.

An angel investor is a high-net-worth individual who provides capital for a startup, usually in exchange for an equity stake in the company. As a result, they have heard millions of “million-dollar pitches,” and have gone through thousands of business plans claiming to be the ultimate solution to just about every problem imaginable.

A seasoned angel investor knows that ideas on their own are not worth much and that the first major step in determining the viability of any business is the quality of its business plan.

Thankfully, the internet has made information very accessible, and with a quick google search, you can get thousands of templates and information on how to build a “winning” business plan. However, this begs the question: if this information is so easily accessible, why does research show that less than 1% of startups get funded by angel investors?

While a lot of these online articles and templates are quite helpful, most of them come from sources that have no real-life, practical experience with crafting fund-attracting business plans. At Joorney, we have experts with practical startup experience who have produced business plans, pitch decks, and other documents that have helped our clients raise millions in funding and achieve other business goals.

If your business is to stand any chance at getting funding from angel investors, these are some tips you need to incorporate into your business plan today.

The Critical Elements Angel Investors Look For

In every business an angel investor examines, they are looking for crucial qualities that show the company knows what it’s doing, understands the market it’s operating in, and can mitigate potential risks. In particular, investors are looking at a handful of critical elements that show that the business is worth investing in.

When drafting a business plan for angel investors, you must note that the primary objective is to grow their wealth and see a return on investment. If your business plan does not clearly show how your business will make money for the investors, you are setting yourself up for failure.

Your business plan should succinctly indicate your startup’s cash flow and other financials and make clear the return the investor can expect and when. This is an area investors evaluate seriously and spend a lot of time brooding over, so be thorough when planning this.

Purpose & Passion

Obviously, investors want to make money but that’s not the only reason they invest, and they know full well not every investment will succeed. Many angel investors are willing to take chances on projects that have potential but don’t ultimately give a positive rate of return.

According to a report published by Wharton Entrepreneurship, only 40% of angel investors exits in 2017 showed a positive return on investment. What this tells us is that many angel investors look at the passion behind a project before investing in it, not just its profitability potential. If an investor finds a project that resonates with them personally, they’re likely to invest in it and take a risk.

Market Knowledge

Knowing your market is essential in securing funding for your burgeoning business. You should clearly show your angel investors the full potential of the market which your startup plans to engage. This will require you to conduct extensive research and present meaningful insight into your market.

This includes things like the size of the market, the market segments, your product’s niche in that market or industry, the growth prospects that are available in that market, new trends and technologies, and any barriers to entry. Make it clear in your business plan that you fully understand the opportunities as well as the barriers and risks and that you have plans to address them.

Concrete Management Principles

Management can make or break a small business or a startup. This relationship between leadership and success means that investors are always concerned that their funded enterprises have the right management team. Since investors are pouring money into a business, they expect regular reports on the enterprise’s health and growth.

To this end, a well-rounded management team that combines research, sales, accounting, manufacturing, and human resources is what these investors seek out to know all main areas of the business will be tended to correctly.

Traction & Early Success Indicators

One great way to ensure investor attraction is to prove your product can be successful by showing evidence of past achievements. This demonstrates the ability of your business to follow through on its ideas and show them where your business is headed.

While angels often take chances at earlier stages, the majority of investors consider a business with some traction because it minimizes the risk involved. Be sure to give details of all revenue streams as well as any potential deals that have been secured so that they can see the bigger potential of your business.

Opportunity to Interact with the Business

Some investors are hands-off, allowing the company to get on with their business without interference. Others, however, prefer to have a more active hand in how the company operates. This intervention could be a blessing in disguise, especially if the investor is passionate about the project and has experience in similar types of business in the past. Their advice could be crucial to help the company grow and prosper.

Entrepreneurs may want to include how much involvement they expect from their investors within the business plan. This clear statement allows everyone to understand the expectations and roles of the investor.

A Valid Exit Strategy

Before angel investors sign off on an investment, they prefer knowing that they have a viable way to exit the investment when the time comes. If you’re looking for angel investors to fund your enterprise, you have to give them a chronological expectation for when they can reap their rewards. Not giving them a time-frame or criteria under which to exit the investment is a red flag that would drive off many angel investors.

How to Craft a Complete Business Plan

If you cover all of the elements above in your angel investor business plan, you will be well on your way to securing funding. However, you still need to make sure that the business plan is organized structurally and follows a predictable, logical order. While there are variations depending on the business model and other factors, this is the standard format we follow at Joorney:

•     Objective
•     Products or Services Offered
•     Market Analysis
•     Sales and Marketing Plan
•     Operations Plan
•     Structure of the Business
•     Management Team Background
•     Financial Overview
•     SWOT Analysis
•     Capital Requirements

Developing a Business Plan Angel Investors Will Be Interested In

Joorney has delved into the requirements of business plans and has experience in covering all the critical aspects of business plans for angel investors. As startups and small businesses compete for funding, proper consideration of the crucial elements needed to convince them to invest becomes more prominent.

Hopefully, with the right advice and guides, more companies can tap into the investor funding they need by focusing on the vital factors investors look for before funding a business. Contact us today to help you craft an investor business plan that will attract the attention of angels, or a pitch deck to get your foot in the door.

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How To Present a Business Plan to an Angel Investors

• December 9, 2021

Making it to the table with a qualified angel investor is quite an accomplishment. Think about it for a moment. Millions of would-be entrepreneurs would love the opportunity to sit before someone who has the ability to underwrite their small business dream. If you get the call and you’re invited to meet with one, by all means, consider it an honor. By getting the meeting, you’ve won a battle that so many lose, day in and day out. Now, with that victory safely nestled away on your resume, it’s time to go out and win the war. Yes, it’s time to win the war.

If you’re ready to sit before an angel investor, then these are the things you must have to come out victorious and with the funds, you need to get your small business dream off the ground and running.

Creating a Business Plan for Investors

Angel Investors are definitely going to want to see a professional business plan that outlines your model and shows them you have a command of the opportunity. This is a given so when you’re scheduling time to meet with them, understand that one of them, if not the first thing this person will ask for, is your business plan.

There are a few key areas that your business plan must cover including the following:

Reasons to Invest

The Angel Investor is going to want you to give them a reason to invest in your venture. A reason to invest is sometimes commonly referred to as The Pitch. Within yours, there has to be a solid, clearly defined driver that resonates with and gets their financial wheels turning. To put it in simple terms, an Angel is looking for a “why” as they listen to you. With that being the case, weave your Pitch narrative into the executive summary and use it to set the tone for your meeting as you begin building a rhythm with the investor.

Investment structure

An Angel Investor will want to see how the investment is structured. Will there be multiple rounds of capital investments or a single infusion? In either case, be prepared to explain why you’ve chosen to position your ask in that manner. Will there be opportunities to convert funds they invest into equity and if so, how much equity are you willing to offer?

Management Team

During your meeting, the Angel Investor is going to want to know about the management team you’ve assembled. The business plan you present should have balanced biographies of each member, their duties, headshots, and highlights of their respective skill sets. Remember, the Angel Investor is meeting with you, but they’re looking to partner with your entire team. For this reason, it’s important that your business plan shows the full scope of their skills and communicates the value each one brings to the opportunity.

Parameters of the Partnership

In some cases, Angels want to do more than just invest in a project. They’re actually interested in rolling up their sleeves and going to work. If this is something you’re willing to offer, take time to spell out those parameters in your business plan. If the Angel has a certain skill set that your business might be lacking, offering them the chance to come on board might be the route to take. Remember, they win when you do, so offering them a position might be just the thing to move the proverbial needle in your favor.

Exit Strategy

Every business plan presented to an Angel Investor has to include an Exit Strategy. An Exit Strategy is defined as a plan to liquidate a position once predetermined criteria have been met. So, with that, be sure your business plan includes an Exit Strategy with several criteria to choose from.

Some of the questions regarding exit strategies include:

Will their exit strategy be contingent on a certain profit objective?

Can they exit after an IPO?

Will a buyout or acquisition trigger an exit?

Will the Angel be given the opportunity to re-invest should they decide to recoup their initial investment and any interest?

All these areas must be addressed in this portion of your business plan.

Presenting Your Business Plan to Investors

How you present your business plan is almost as important as the document itself. Remember, no matter how well the plan is written, in this meeting you are the voice that brings it to life! There are a few things you must focus on as you ready yourself to present.

Practice bringing your business plan to life. Think of it this way, if all the meeting consisted of was you dropping off a business plan, shaking hands, and hoping to hear back in a few days, then what was the point? No, the Angel took the meeting because they wanted to hear from you. So, practice, practice, and then practice some more. One other thing to consider is that Angels like stories. In fact, where they’re sitting right now is a story in itself. Take this time to tell them yours and watch them tell you theirs. This friend is how partnerships are born, deals are sealed, and the journey toward success begins.

Understand the Problem

At some point, probably early on, the Angel is going to want to know what problem your opportunity solves. Be sure you’re ready to speak to this in great detail. Don’t be afraid to show the work you’ve put into your vision as they truly want to hear from you. As you’re discussing the problem and your unique solution, be sure to do it with enthusiasm. Angels love the enthusiasm. It sparks something in them, and they begin to see themselves as part of your solution, imagining the difference they can make if they decide to invest.

Will your product or service have a societal impact? If so, don’t hesitate to mention that people like these absolutely love to be a part of ideas and ventures that are making a difference in our world. Is there an environmental component to your business? If the answer is yes, spend time enthusiastically describing the impact and how you see it making the world a better place.

The Investor Business Plan Writers at the Coley Group Can Help

When it comes to developing business plans that pass the Angel Investor test, The Coley Group sits at the head of the class. We specialize in developing professional business plans that appeal to investors and position our clients to secure the seed capital they need to drive incremental, long-term success. Over the years we’ve written investor-grade business plans for clients throughout the globe. From the US to the UK, Canada, Mexico, Asia, and beyond, words flowing from our staff of MBA writers have graced every continent.

We welcome the opportunity to serve you. If you have any questions regarding the services we offer, please contact us today.

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Angel Investors: Who They Are, Pros and Cons

Steve Nicastro is a former NerdWallet writer and authority on personal loans and small business. His work has appeared in USA Today, The New York Times and MarketWatch. He holds a bachelor’s degree in journalism from Quinnipiac University.

Tina Orem is an editor at NerdWallet. Prior to becoming an editor, she covered small business and taxes at NerdWallet. She has been a financial writer and editor for over 15 years, and she has a degree in finance, as well as a master's degree in journalism and a Master of Business Administration. Previously, she was a financial analyst and director of finance for several public and private companies. Tina's work has appeared in a variety of local and national media outlets.

Christine Aebischer is an assistant assigning editor on the small-business team at NerdWallet who has covered business and personal finance for nearly a decade. Previously, she was an editor at Fundera, where she developed service-driven content on topics such as business lending, software and insurance. She has also held editing roles at LearnVest, a personal finance startup, and its parent company, Northwestern Mutual. She is based in Santa Monica, California.

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Table of Contents

What is an angel investor?

How does angel investing work, pros and cons of angel investors, should you get an angel investor, how to find an angel investor, alternatives to angel investors.

Angel investors are typically high net worth people who fund startups or early-stage businesses in exchange for stock or ownership in that company. This makes them a good source of funds for newer businesses that want to avoid taking out a small-business loan .

Many angel investors are accredited investors, which is a designation that requires a minimum net worth of $1 million, at least $200,000 in annual individual income or at least $300,000 in annual joint income (see the Securities and Exchange Commission website for details). People who hold a Series 7 license (a broker license), a Series 65 license (an investment advisor license) or a Series 82 license (a private securities offerings license) may also qualify.

Angel investors can be friends, family, members of your professional or social networks, individuals or a team of investors. Angel investors often form “angel groups,” in which they evaluate businesses and invest together, pooling resources to make larger investments. Angel investments can be thousands to millions of dollars, depending on business size and ownership sold.

How much do you need?

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We’ll start with a brief questionnaire to better understand the unique needs of your business.

Once we uncover your personalized matches, our team will consult you on the process moving forward.

Angel investors typically want ownership in the company they invest in, making this a form of equity financing . An angel investor may provide capital in exchange for equity (stock in the company) or convertible debt, which is a loan that can be converted to equity at a later date.

For example, a company that's valued at $1 million might sell 20% of its equity, worth $200,000, to an angel investor or an angel group.

Generally, angel investors are interested in high-growth, high-potential startups that can earn them several times their original investment. In other words, the potential rewards need to be substantial enough to outweigh the numerous risks of investing in a startup.

A startup business refers to any business in the early stages of growth, including businesses that haven’t started operating yet. Because most banks want to see at least two years in business before approving a business loan, pre-revenue startups may need to turn to venture capital firms or angel investors for funding.

Advantages of angel investors

Expertise. Angel investors often have industry expertise. They may be entrepreneurs who started a business in your field and can provide advice and coaching to help you succeed.

Connections. Angel investors may have a lot of industry connections. They may be able to introduce you to new customers, financing sources , business partners and other relevant contacts.

Support. Because their investment makes them partial owners of the business, angel investors typically make money only if the business is successful. This position should motivate them to help add as much value as possible.

Deep pockets. If your small business needs financing later, angel investors might make follow-up investments.

Different qualification requirements. Angel investors look primarily at you and your business’s potential, which means they are a good alternative funding source if your business can’t get financing from a bank or financial institution.

Disadvantages of angel investors

Scrutiny. Investing in a startup is risky, and angel investors are typically looking for a high-growth type of business. Even if you think your company offers outstanding growth potential or a game-changing product, angel investors still might reject your pitch. 

Shared control. Some angel investors might demand a large ownership position, and you may end up selling more of the company than you had planned.

Time consuming. Do due diligence on an angel investor to ensure their interests are aligned with yours. Ask for references and, if possible, talk with other startups that raised money from this investor. You may prefer an angel investor who will be a business partner, help your company grow and contribute to its success, instead of one who's just looking for a return on their investment.

Startups and early-stage businesses that can be scaled for growth are generally the most attractive angel investments. This means your business should be able to increase its sales very quickly over the next few years without a huge increase in fixed costs and expenses. This should be detailed for a potential investor in components of your business plan , like financial projections and market analysis.

If you’re willing to give up ownership and potentially control of your company — and think you’d benefit from bringing an experienced investor on board — then angel investors could be a smart move.

You can find potential angel investors in places like these:

The Angel Capital Association , which is the official industry alliance of over 250 of the largest angel investor groups in the United States.

AngelList , which helps match founders with investors.

Gust , which evaluates various funding sources for startups.

MicroVentures , an investment bank offering private market investments.

The Angel Resource Institute , a nonprofit that provides education and information on the best practices in the field of angel investing.

If you’re having trouble finding an angel investor, or you decide angel investing isn’t right for your business, there are some alternatives:

Startup business loans . Banks , online lenders or alternative lenders like community development financial institutions (CDFIs) may offer startup business loans, especially if you have been operating already. Loans can be difficult to qualify for and keep you locked in with fixed payments over a set period of time, but do not require you to trade ownership in your business for funding.  

Startup business grants . While grants offer free money, they can also be difficult to find and qualify for, and come in smaller amounts than loans or angel investments.  

Venture capital . Though similar to angel investing, venture capital (VC) is early-stage business funding by a firm or company as opposed to a wealthy individual. Venture capital can be slightly more difficult to qualify for, and usually VC firms invest in a company after an angel investor. 

Equity crowdfunding . Another form of equity financing whereby you trade equity or ownership in your company for funding, equity crowdfunding makes use of the internet to find groups of investors. Online platforms allow business owners to share information about their business with potential investors. 

On a similar note...

How to Approach Angel Investors: Do’s and Don’ts for Startups

In the challenging world of startup funding, approaching angel investors is a critical step. Learn the essential "do's" for success, And avoid common "don'ts"

Securing funding for a startup can be a challenging task that requires careful consideration. One avenue that holds significant promise is seeking investments from angel investors. These HNWIs can provide the necessary capital, invaluable guidance, and mentorship to help a startup thrive. However, approaching angel investors requires finesse, strategy, and a clear understanding of the dos and don’ts regardless of your industry: healthcare, fintech, etc. In this article, we will delve into the world of angel investors, exploring the key steps and common mistakes that should be avoided to maximize the chances of success. Whether one is a first-time founder or a seasoned entrepreneur, this guide will provide essential insights on approaching angel investors effectively. 

The Do’s 

Research Your Target Investors

When trying to attract angel investors , it is recommended that you seek out individuals who have a record in investing in startups similar to your own. It’s essential to consider factors such as the stage of your startup, the typical investment amount, angel investors in your city/region, the startup funding opportunities available, and their risk tolerance. Considering these considerations, you can better target suitable investors for your business venture.

Build a Strong Pitch Deck

When pitching to angel investors , craft an impactful and concise presentation that visually and effectively portrays the unique value your startup offers, the potential of the market you intend to serve, the expertise and qualifications of your team, and the financial projections that support your growth plans. Your pitch checklist should include the use of compelling graphics and data-driven insights. Effective startup pitch techniques make a convincing argument and inspire confidence in potential investors or stakeholders. A helpful pitch deck tip to remember that if you have confidential information you’re worried about, it’s best not to include it in your product pitch deck. Requesting people to sign a non-disclosure agreement (NDA) can sometimes cause friction. You should only request an NDA when you genuinely think it’s necessary. Our pros here at Marquee Equity can help you tailor-make successful angel investor pitches by creating effective startup pitch techniques that build trust with startup investors right from the get-go.

Develop a Solid Business Plan

Develop a comprehensive business plan that provides a detailed overview of your long-term vision, including your goals, objectives, and how you plan to achieve them. Your plan should also include specific milestones to measure your progress and growth strategy to help you reach these milestones. Additionally, it’s essential to identify potential challenges and risks your business may face and outline strategies to mitigate them to ensure your long-term success.

Network 

One of the best practices for startup funding is to leverage your existing network to get introductions to angel investors on social media or startup funding workshops offline. Your angel investor outreach online must start by establishing a professional online presence for your startup with a website, social media, and LinkedIn accounts. Maintain updated and engaging profiles to reflect your expertise and business credibility. Building a strong online presence for startup funding is vital to success in the business world.

Show Traction

Ideally, this should be done during the initial angel investor meeting . Demonstrate that your startup is gaining traction in the market by showing evidence that your startup is gaining traction in the market through metrics such as user growth, revenue, partnerships, or other key indicators. If available, highlight customer testimonials or case studies to support your startup’s success further.

Be Transparent and Honest

Nurture relationships with angel investors by being transparent about your startup’s challenges, risks, and limitations. Avoiding exaggeration and making unrealistic promises is essential to maintaining angel investor connections.

Send Unsolicited Emails

Avoid cold emailing angel investors without prior connection or intro. It’s unlikely to get a response and may be considered spam.

Maintaining transparency while safeguarding sensitive information that could jeopardize your startup’s security is crucial. Avoid sharing sensitive information that could be misused.

Disregard Due Diligence

During the due diligence process, it is imperative to be well-prepared to provide investors with the necessary documents, financial statements, and references. Maintaining transparency and avoiding withholding any pertinent information that could impair your reputation or business relationship is essential.

Be Impersonal

Treat investors as partners, not just sources of funding, and actively seek their expertise and advice. Lastly, a common pitch deck guideline is to avoid sending generic, one-size-fits-all pitches.

Don’t Pressure for Quick Decisions

Give investors time to evaluate your proposal and ask questions. Avoid pressuring them for an immediate decision.

Neglect Follow-Up

It’s important to have a clear understanding of where things are heading. As a rule, don’t forget to express your gratitude at the end of the meeting. Remember that you want your business to last for the long haul, and having good etiquette and showing courtesy can help you achieve that. Maintain open communication even if they initially decline.

Don’t Disregard Rejections

If an investor decides not to invest, respect their decision and maintain a positive relationship. They may reconsider in the future or introduce you to other potential investors. Remember that building relationships with angel investors takes time and persistence. When interacting with others, remember that it’s an opportunity for growth, even if it doesn’t result in immediate funding. Each interaction allows you to enhance your entrepreneurial training and learn more about angel investment fundraising strategies , even if it doesn’t yield instantaneous results. Creating a network of supportive investors is just as crucial as obtaining capital for your startup’s long-term success.

Tying It All Up

To become a successful startup, securing funding from angel investors can be a game-changer. While the process may not be simple, following the do’s and don’ts outlined in this blog, you’ll gain valuable strategies to help take your startup to new heights. Remember to thoroughly research potential investors, craft a compelling pitch, and demonstrate a solid business plan with a clear path to profitability. Embrace rejection as a part of the journey and be determined and resilient in navigating the world of angel investing. To become the next angel investment success story , call our pros at Marquee Equity at +1-213-600-7272.

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Business Investors Near Me: A Local Perspective

Local investors are the heartbeat of community-driven growth. Beyond funding, they bring insights, connections, and shared values. In the nexus of business and locality, their presence becomes a catalyst, propelling businesses to thrive within the unique tapestry of our local landscape.

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What Is an Angel Investor?: Who They Are and What They Can Do for Your Business

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Whether you’re looking for seed investors to get your business off the ground or you need to raise money to expand your business (and your profit), angel investors are worth looking into. But how do they work? And how are you supposed to get one?

That’s what we’re here to explain. So if you want your business to be touched by an angel investor, read on to learn how you can make that happen.

What you should know about angel investors

Angel investors 101, how does angel financing work.

• The pros and cons of angel investing

How to get an angel investor

Other funding options.

Meet the all-in-one online platform designed for freelancers. You’ll get free access to banking, invoicing, bookkeeping and tax software and accept money from anyone, anywhere.

Angel investors are individuals who invest in startups and young businesses by providing funding in exchange for equity (ownership shares) in the business. Technically speaking, angel investors must be accredited investors, but increasingly, you’ll see business owners’ investing family and friends described as angel investors—even if they don’t meet the wealth requirements.

Not all angel investors work individually, though. There are plenty of investor groups, or angel networks, out there formed by investors who pool their resources to invest in companies.

Some angel investors and angel networks have specific funding interests. For example, Hivers and Strivers is an angel group that invests in the business ventures of US military academy graduates. Likewise, you might find investor groups that fund businesses with founders from minority groups.

As we said, angel investors make a startup investment in exchange for equity. So how much money can you expect to get? Well, the numbers can range from tens of thousands to (rarely) millions. But according to the U.S. Small Business Administration (SBA), the average investment from an angel investor is $330,000—not a bad chunk of change. 2

Exciting as that sounds, we want to be clear that angel investors are not just throwing money at your business and hoping you do well. Angel investing is a type of equity financing. So while getting money is great, don’t forget that you’re giving up business equity to get it. How much equity will depend on your specific investment angel and the deal you make with them, but we’ve seen anywhere between 10% and 40%.

What the angel investor does with that equity will also depend on the individual, but it’s pretty common for angel investors to get heavily involved with the businesses they fund.

You’ll see lots of active angel investors who see their investment as an opportunity to provide not just money but also advice, mentorship, and networking opportunities. That means you can benefit from the entrepreneurial experience of a seasoned investor, but it also means that you’re giving up at least a little control.

So is the trade-off worth it?

How does an angel investor get paid?

Well, there’s no guarantee that an angel investor will get paid. In fact, a lot of angel investors claim that angels usually lose money on their investments because they pick unsuccessful startups.

But let’s assume your business takes off and everything goes well (yay!). In that case, how does your angel investor get paid? It all goes back to that equity they take.

Angel investors are anticipating what is often referred to as an equity event. In many cases, the startup ends up getting sold, and the angel’s equity means they get a share of the profits. Other startups have an IPO, or initial public offering. In that case, the company starts selling shares on the stock market. Sometimes, the angel gets paid off as part of the IPO. Otherwise, the IPO gives the angel investor a chance to cash out their shares. In some instances, angels simply get dividends that the startup pays to its owners.

All of which is very nice for the angel investor. But is the trade-off in equity worth it for you?

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The pros and cons of angel investors

Honestly, there’s a lot to like about angel investors.

Like the fact that they provide financing to startups that haven’t been around long. Getting startup business loans can be difficult since banks don’t want to risk lending to brand-new businesses. Angel investors are more likely to take a risk on young, up-and-coming companies (and young entrepreneurs).

It’s the same with cash flow. If you want to get the best small-business loans , your business will need to have a history of profit and healthy cash flow. But angel investors care more about where your business is going—they may not care if you haven’t had $250,000 in profit for the past two years.

Aside from providing financing to startups that otherwise can’t get money, angel investors provide those mentorship and networking opportunities we talked about above.

And of course, one of the best benefits of getting money from angel investors is that you don’t have to pay anything back (at least, in the form of a periodic payment). The money is yours to use for the business.

Which brings us to the big con: losing equity in your business. Again, angel investors can request anywhere from 10% to 40% in your business. With any luck, that will never be a problem because you and your angel investor will get along so well and agree on the direction the business is going. But there is a possibility that your angel investor will use their equity to push the business in a direction you don’t like.

Remember, your angel investor becomes a minority shareholder in the success of your business. That means you should look for an angel who doesn’t just have money, but who also has the expertise you need to help your business grow.

Now you know the pros and cons of angel financing. Still interested? Then let’s talk about how to get in on this source of funding.

First, make sure your business is a good candidate for angel investing. Angels tend to look for a high return on investment, so if you want to open just one boutique clothing shop and never expand, don’t be surprised when investors pass on your pitch. But if you’ve got a business that will explode—if you can just get the right funding—then you’re exactly what an angel investor wants.

Put another way, angels (and venture capitalists) look for businesses that are ready to scale with the help of some capital. More specifically, they want to invest in businesses that will eventually have an IPO (initial public offering) or be acquired—giving the angel a good return on their investment.

So come with a good pitch. As part of this, make sure to create a business plan that shows business projections with how you plan to achieve your goals. Likewise, you should include information about the market opportunity for your business—what niche are you filling, and who will buy your services or products? Go ahead: prove you’ve got the entrepreneurship to succeed.

Once you’ve got a good pitch ready, you can find angel investors. There are online directories, like AngelList , but don’t forget to look locally too. Your local Chamber of Commerce may have great leads on investors looking to invest money in local businesses. Some universities have strong connections with angel investors. And if you have a flair for the dramatic, you can even try to get on Shark Tank . There are plenty of ways to find angel investors to pitch to.

However you find your investor, make sure they’re a good fit. While it’s tempting to accept funding from any investor who will give you money, you want to be sure that their vision of your partnership and the company aligns with your own. Otherwise, giving up that equity will be a problem.

But if they like your pitch and you like their style, then congrats! You’ve found yourself an angel investor.

If angel investing isn’t right for your business, you have plenty of other small-business funding options .

For example, if you want another type of funding that doesn’t require you to repay a loan, you can look into grants . Grants will give you free money for your business, making them a super appealing option for most businesses. The downside? Grants require lengthy applications, and they’re highly competitive. Plus, the funds may be earmarked for specific uses. Even so, grants are an option for free cash.

Then there’s crowdfunding . There are plenty of sites that offer crowdfunding for startups (though Kickstarter is our favorite). You pitch your idea to the world, and if people like it, they’ll help fund your project. Usually people fund in exchange for some kind of reward, but equity crowdfunding is common too. If your product clicks with people, it can be a boon for your business. But with so many companies competing for people’s money and attention, you’ll have to invest plenty of time into making your pitch.

And of course, there are loans . Unlike angel investors, grants, and crowdfunding, loans require you to actually repay the money you get, which makes it a less appealing option. But loans are a tried-and-true way of funding and expanding businesses, and you have tons of loan options. So while it may not be your first choice, there are plenty of reasons to get a startup business loan . For the record, we’ve found Lendio to be the best source of loans for most businesses.

Enter your loan needs and qualifications to get matched with a list of lenders best suited to you. Then, sort by the financing factor that you find most important. ( Note:  not all lenders allow personal loans for business use.)

The takeaway

A wealthy angel investor can be a great way of securing your business’s financial future—if you have what it takes to find them, pitch to them, and secure their investment. Sure, you’ll have to give up some company equity, but you’ll receive money and mentorship in return.

Not a bad trade-off, we think.

Not sure angels are right for you? Check out another nontraditional funding option with our guide to the best crowdfunding sites for startups .

FAQs about angel investors

Angel investors are paid when the company is sold or goes public on the stock exchange (through an IPO or SPAC). Angel investors provide funding to a company in exchange for an equity (or ownership) stake, so when the company is sold or valued on the stock market, the equity stake can be sold based on the company’s valuation. For example, Facebook had a valuation of $90 billion when it was first traded on the stock market. So, if an angel investor had provided funding for a 10% equity stake in the company, they could trade in that stake for $9 billion based on the company’s valuation.

An angel investor is an investor or a group of investors who provide funding to startups and young businesses in exchange for an equity stake in the company. They provide money upfront to businesses that want to scale in exchange for money in the future (an equity stake) when the company goes public on the stock market or is sold.

What percentage of equity do angel investors want?

The exact amount of equity an angel investor wants will vary from investor to investor and startup to startup, but most estimates we’ve seen are in the 10% to 40% range.

How is an angel investor different from a venture capitalist?

As we mentioned, angel investors usually invest in younger startups than venture capitalists do. They also invest less money, and they usually expect smaller returns than a VC firm would.

For a more detailed breakdown, check out our comparison of angel investors vs. venture capitalists .

Who are some examples of angel investors?

You’ve probably seen angel investors like Mark Cuban and Lori Greiner on Shark Tank who have invested in BeatBox Beverages and Scrub Daddy. Naval Ravikant is another prominent angel investor who invested early in Uber, Poshmark, Postmates, Clubhouse, and Twitter. He's also the cofounder of the startup community AngelList. Joanne Wilson is another angel investor who is well known for investing in female-founded companies. Some of her investments are Foo52, DailyWorth, Rick’s Picks, and Hot Bread Kitchen.

Can anyone be an angel investor?

Technically, no, not everyone can be an angel investor. An angel investor has to be an accredited investor with the U.S. Securities and Exchange Commission, which has income and net worth requirements. So most “legit” angel investors are very wealthy individuals looking for investment opportunities.

That being said, lots of people get described as angel investors without meeting the technical definition. Non-accredited investors, like friends and family who decide to invest in your startup, might get called angel investors—if only because investing in a risky new startup is a pretty angelic thing to do.

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• Investor.gov, “ Updated Investor Bulletin: Accredited Investors .” Accessed December 6, 2022.
• U.S. Small Business Administration, “ Small Business Finance Frequently Asked Questions .” Accessed December 6, 2022.
• Angel Capital Association, “ FAQs for Angels & Entrepreneurs .” Accessed December 6, 2022.

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Angel ROI: How Much Equity Should You Expect To Give an Angel Investor

Written by Dave Lavinsky

When pursuing funding for your company, you are bound to consider angel investors at some point. They are a common source of early-stage funding and can provide the boost your company needs to get off the ground. But before taking angel money, it is important to understand how these investors work and how much they expect in return. This guide will explain everything you need to know in terms of angel investments , ROI, and what to expect in terms of equity.

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How Most Angel Investors Invest In Companies

Angel investors are typically wealthy individuals who invest their money into companies in exchange for equity. They are often former entrepreneurs themselves or have some experience in the industry in which the company operates. Because they are investing their own money into the business venture, an angel investment tends to include more hands-on management than venture capitalists investment.

There are three ways that angel investors typically invest in companies:

• Direct equity stake: The angel investor buys shares of the company outright and becomes a shareholder.
• New Business loans: The angel investor loans the business owners money with the expectation that the loan will be paid back with interest.
• Convertible preferred stock: The angel investor purchases shares of preferred stock that can be converted into common stock at a later date.

What Is The Average ROI For Angel Investors?

On average, potential angel investors expects to see a return of about 27% or 2.5 to 3 times their initial investment within 5 to 7 years. This means that if an angel investor invests $100,000 into a company, they expect to see a return of $250,000 to $300,000 over the next 5 to 7 years.

However, it is important to keep in mind that angel investing is a high-risk, high-reward venture. While some angel investors may see returns of 10x or more, others may end up losing all of their investment. Some angel investors may ask for a higher equity stake in exchange for a lower ROI, while others may be more flexible. Most angel groups invest knowing that very few startups succeed, which is why they do not tend to start with larger investments. 

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Factors That Affect An Angel Investor’s Equity

There are a few key factors that will affect how much equity an angel investor will receive in return for their investment.

• Company’s Valuation: The pre-money valuation is the value of the company before the angel investor makes their investment. This number is important because it will determine how much of the company the angel owns after they invest, and what their equity positions will be.
• Timing: The angel investor’s equity stake will also be affected by when they make their investment. If the angel invests in the first round or early on in the company, they will likely receive a larger equity stake than if they invest later down the road.
• Their Initial Investment: The size of the original investment helps to dictate the equity the angel investor receives. Typically the larger the angel’s investment, the more equity they will receive.
• The Amount Of Money The Company Needs: If the company is seeking a large amount of money or venture capital, the angel’s equity stake will be diluted more because they will own a smaller percentage of the company.

What Ownership Stake Should You Offer an Angel Investor?

As a general rule of thumb, angel investors usually receive between 10% and 20% ownership stake in the companies they invest in. However, there are a few factors that can affect how much equity an angel investor will receive.

Factors Affecting Ownership Stake for Angel Investors 

Stage of the company.

If the company is early or startup stage and has yet to generate any revenue or annual income, the angel investor will likely receive a larger equity stake. However, if the company or small business is further along and has already generated some revenue, the angel investor will likely receive a smaller equity stake.

Investment Amount 

As mentioned before, the more angel’s provide funding, the more equity they will receive. This is often discussed before any deal is made and clearly outlined on the term sheet . 

Investor’s Experience 

If the angel investor has a lot of experience in the industry or are accredited investors, they will likely receive a larger equity stake. However, if the angel investor is new to the industry, they will likely receive a smaller equity stake.

When business owners decide to look for angel funding, they will usually negotiate their equity as well as their ROI with the angel investor. Some angels may ask for up to 50% equity in the company, while others may be willing to accept a lower equity stake in return for a higher ROI. Others still may be willing to offer equity financing to allow for some form of equity along with a business loan. There are many different options available when businesses find angel investors, so be aware that you will need to negotiate with investors in order to come to an agreement that is fair for both parties.

When Do Angel Investors See A Return?

An angel investor typically sees a return on their investment within 5 to 7 years. However, it is important to keep in mind that angel investing is a high-risk, high-reward venture. While some angel investors may see returns of 10x or more, others may end up losing all of their investment.  

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What Are Other Ways That Angels Earn From Their Investments?

There are a few other ways that angels can profit on their investment. They may negotiate these terms in order to ensure they get some money back no matter what the outcome of the company is. Three of these strategies include:

• Exit strategies: One way that angel investors earn from their investments is through successful exits. An exit strategy is a plan for how the angel investor will get their money back when they sell their equity stake in the company. There are a few different exit strategies that angel investors may use, such as an IPO (Initial Public Offering) or a sale of the company.
• Dividends: Another way that angel investors can earn from their investments is through dividends. Dividends are payments that angel investors receive from the company in return for their equity stake. The amount of dividends that an angel investor receives will depend on the company’s profitability and the angel’s equity stake in the company.
• Employee Compensation: Some angel investors may negotiate a role in the company in return for their investment. This could include a board seat or a position as an advisor. Angel investors who take on this type of role will typically receive some form of compensation, such as a salary.

Angel investors play an important role in the startup phase for many businesses, and is often included in their initial business plan. They provide much-needed funding for early-stage companies and help them to grow and scale. In return for their investment, angel investors usually receive equity in the company. It’s important to remember that angel investors are taking on a high risk by investing in early-stage companies. Therefore, they usually expect to see a high return on their investment. Keep this in mind while negotiating with angel investors, as you will need to come to an agreement that is fair for both parties.

Angel Investor Frequently Asked Questions

What is the average roi for angel investors.

The average ROI for angel investors is 27% within 5 to 7 years. However, it is important to keep in mind that angel investing is a high-risk, high-reward venture. While some angel investors may see returns of 10x or more, others may end up losing all of their investment.

What is an exit strategy?

An exit strategy is a plan for how the angel investor will get their money back when they sell their equity stake in the company. There are a few different exit strategies that angel investors may use, such as an IPO (Initial Public Offering) or a sale of the company.

What are dividends?

Dividends are payments that angel investors receive from the company in return for their equity stake. The amount of dividends that an angel investor receives will depend on the company's profitability and the angel's equity stake in the company.

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An angel investor is an affluent individual who provides critical capital and funding to startups during their nascent stages. Distinct from venture capitalists and private equity firms, these investors not only offer financial support in the form of money but also contribute mentorship and strategic networking opportunities.

Key Takeaways

• An angel investor provides essential capital and resources in the early stages of a startup, often filling a crucial gap before venture capitalists step in.
• Beyond money, an angel investor contributes valuable mentorship, industry insights, and networking opportunities to a new company.
• A well-crafted business plan is vital for startups to attract angel investors, as it demonstrates the potential for growth and return on investment.
• Angel investing plays a significant role in the entrepreneurial ecosystem, offering not just funding but also strategic guidance to startups.
• Understanding the dynamics of angel investing, including the differences between an angel investor and other types of investors, is crucial for startups seeking early-stage funding.

Angel investors are pivotal for entrepreneurs in transitioning from initial concept to a viable business, often bridging the crucial early funding gap.

Historically, angel investing began as informal investing by wealthy individuals in promising startups. Over time, this evolved into a more structured approach to early-stage financing. Today, an angel investor remains integral to the startup ecosystem, often stepping in where traditional financing methods are inaccessible. As the business landscape continues to evolve, the role of angel investors in providing both capital and invaluable guidance continues to be of paramount importance, underscoring their enduring relevance in nurturing new business ventures.

Pre-Planning Process

An angel investors, pivotal in the startup ecosystem, often does not directly engage in a founder’s pre-planning process. This stage, essential for foundational development, precedes external funding and is where the business’s core ideas and strategies are refined. Despite their indirect role, understanding this phase is crucial for angel investors, as it reveals the new company’s potential and strategic direction.

The pre-planning phase is where startups identify their target market, develop their business model, and analyze competitors. For an angel investor, these insights are crucial. They demonstrate the startup’s market understanding, the viability of its business model, and the strength of its value proposition. While an angel investor provides capital, their decision to invest hinges on the quality of the founder’s pre-planning.

Angel investors look for signs of a robust pre-planning process, including a well-defined business model and realistic market assessments. This knowledge is key in evaluating a startup’s readiness and potential success, influencing their investment decisions.

The pre-planning process offers angel investors a lens to assess new company viability and guides them in their capitalallocation, underscoring their critical role in the entrepreneurial landscape.

Business Plan Document Development

A well-crafted business plan is a linchpin for a startup seeking to attract an angel investor. It’s not just a document; it’s a testament to the founder’s vision, strategy, and potential to scale. For angel investors, who often bridge the gap between self-funding and venture capital, the business plan serves as a critical tool in evaluating the feasibility and future profitability of their investing endeavors.

An angel investors primarily looks for clarity and thoroughness in a new company’s business plan. They seek detailed insight into the new company’s value proposition, market analysis, and competitive landscape. A comprehensive business plan should also clearly outline how the startup intends to use the angel investor’s capital. It should detail the expected milestones and how each tranche of funding will drive growth and development. This transparency in financial planning and allocation of resources assures investors that their money is being put to optimal use.

Furthermore, investors examine the business plan for realistic financial projections and a well-thought-out exit strategy. This includes understanding the new company’s revenue model, cost structure, and the break-even point. They also assess the management team’s competence, as their ability to execute the plan is as crucial as the plan itself.

In essence, the business plan is a pivotal factor for angel investors. It not only showcases a new company’s potential for success but also reflects its readiness to effectively manage and grow with the invested capital.

Startup Entrepreneurs

The journey of a startup entrepreneur seeking angel investment is often illuminated by inspiring success stories. These narratives, where startups turn into market leaders with the backing of an angel investor, sets a compelling precedent. As an entrepreneur, it’s essential to understand what to expect when seeking angel investment. Unlike venture capitalistsor private equity firms, angel investors, often termed as business angels or informal investors, typically engage during the early stages, providing not just capital but also valuable mentorship and network access.

When approaching an angel investor, startups should focus on crafting a compelling pitch. This pitch should clearly articulate the investment opportunity, how the startup plans to use the funding, and its potential for growth. It’s crucial for the founder to convey their passion, the uniqueness of their business, and how it stands out in the market. The ability to effectively communicate the startup’s vision and strategy is key in attracting angel investment.

Real-life case studies of startups that successfully secured angel investment can offer practical insights and relatable experiences. These stories often highlight the importance of aligning the new company’s goals with the interests of the angel investor and the significance of transparent communication.

In conclusion, best practices for engaging with angel investors include thorough preparation, clear articulation of the investment opportunity, and being open to investment advice. Navigating this path requires understanding the nuances of angel investing and effectively leveraging the unique support that these early-stage investors provide.

Business Students

Angel investing holds a unique allure in the entrepreneurial landscape, particularly for business students exploring the intricacies of early-stage financing. The educational journey into understanding angel investment encompasses grasping the nuances of how angel investors, distinct from venture capitalists or institutional investors, play a pivotal role in a new company’s growth. Unlike traditional sources of capital, angel investors often bring a combination of money, mentorship, and networking opportunities to the table.

The theoretical aspects of angel investing cover a range of topics from the evaluation of investment opportunities to understanding the securities act and its implications for startups and investors. Business students should delve into the concept of equity financing, where investors like angel investors and seed investors acquire a stake in the new companyin exchange for their funding. This study also involves exploring venture research, analyzing deal flow, and understanding the roles of various stakeholders, including high net worth individuals.

Real-life applications provide a relatable context, illustrating how theoretical concepts are applied in the real world. Analyzing case studies and current trends offers insights into the decision-making processes of investors and entrepreneurs.

In conclusion, academic study plays a crucial role in comprehending angel investing. It equips future entrepreneurs and financial professionals with the knowledge to navigate the complex dynamics between startups, investors, and market forces effectively.

The landscape of small and medium-sized businesses (SMBs) is often transformed by angel investments. These investments, known as angel funding, can propel SMBs to new heights, offering not just capital but also strategic expertise. Unlike venture capitalists or venture capital firms, angel investors, including private investors and wealthy individuals, often engage with businesses in their nascent stages. For an entrepreneur or a startup founder, understanding the potential and limitations of angel investing, which could include an angel investment network, is key to harnessing its benefits.

SMBs seeking angel investment should be cognizant of specific criteria and processes. Angel investors typically look for businesses with a strong value proposition and potential for high returns. Unlike non-accredited investors, investors often bring significant money and experience to the table. It’s crucial for SMBs to effectively communicate their vision, market position, and how the funding will be utilized to scale the business.

SMBs considering angel investment should strategically weigh their options. This includes understanding the nuances of equity exchange, aligning with the right investors, and being prepared to leverage the expertise and networks that investors can provide. The right approach can open doors to significant growth and development opportunities for SMBs.

Frequently Asked Questions

• What differentiates angel investors from venture capitalists?

Angel investors and venture capitalists have distinct roles in the startup ecosystem. The scale of investment is a primary differentiator; angel investors typically provide smaller amounts of capital compared to venture capitalists. They usually get involved at an earlier stage, often when the startup is in the ideation or development phase, offering seed funding. In contrast, venture capitalists generally engage at later stages when the startup has established operations and a clearer path to profitability. Additionally, investors may offer more flexible terms and take a personal interest in the entrepreneur’s success, whereas venture capitalists focus more on the financial returns and business scalability.

• How do angel investors typically contribute beyond capital?

Beyond providing capital, angel investors often bring invaluable non-monetary contributions to a new company. This includes mentorship, where they share their expertise and experience, guiding the founder through the complexities of growing a business. They also offer network access, connecting entrepreneurs with potential customers, partners, and even future investors. Strategic advice from investors can be crucial, as they may have industry insights and operational knowledge that can help steer the new company towards success.

• What are common terms and conditions set by angel investors?

The terms and conditions set by angel investors often revolve around equity exchange and the future financial trajectory of the startup. Common agreements include equity stakes in return for funding, with expectations clearly outlined regarding the new company’s growth and potential exit strategies.Investors may also seek advisory roles or board positions. The use of an angel investor tax credit is another aspect, especially in jurisdictions that offer tax incentives for investing in startups. It’s advisable for entrepreneurs to consult with a financial advisor or an accredited investor to understand these terms thoroughly and ensure alignment with the new company’s goals and capabilities.

Related Terms

Also see: Venture Capital (VC) , Seed Round , Equity Financing , Accredited Investor , Early-Stage Startup , Startup Assets

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What Is an Angel Investor?

Features of angel investors, who can be an angel investor, sources of angel funding, investment profile, the bottom line.

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Angel Investor: Definition and How It Works

Gordon Scott has been an active investor and technical analyst or 20+ years. He is a Chartered Market Technician (CMT).

An angel investor provides initial seed money for startup businesses, usually in exchange for ownership equity in the company.

The angel investor may be involved in a series of projects on a purely professional basis or may be found among an entrepreneur’s family and friends . The investor’s involvement may be a one-time infusion of seed money or an ongoing injection of cash to get a product to market.

Angel investors aren’t usually in the loan business. They’re putting money into an idea they like, with the expectation of a reward only if and when the business takes off.

Key Takeaways

• Angel investing may be the primary source of funding for an entrepreneur who finds it more appealing than other forms of financing like bank loans.
• This is risky business for the angel investor and usually represents no more than 10% of an angel investor’s portfolio.
• An angel investor may be hands-off or may get deeply involved in the early stages.

Laura Porter / Investopedia

Most angel investors are relatively wealthy individuals who are looking for a higher rate of return than can be found in more traditional investment opportunities. They search for startups with intriguing ideas and invest their own money to help develop them further.

The ventures are, by nature, extremely risky. A survey by the Angel Capital Association estimated that only 11% of such ventures end with a positive result. Their investments in each venture are relatively modest, averaging about $42,000.

Most angels keep their involvement in startups to no more than 10% of their portfolios .

Why Look for an Angel?

An entrepreneur may seek an angel investor over more conventional financing. The terms tend to be more favorable, and, in fact, the angel investor doesn’t expect to get the money back unless the idea succeeds. They often seek an equity stake and a seat on the board.

Angel investors focus on helping startups take their first steps rather than getting a favorable return on a loan.

Angel investors have also been called informal investors, angel funders, private investors, seed investors, or business angels. They seek prospects through online crowdfunding platforms or join networks that pool capital for greater impact.

Origins of Angel Investors

The term “angel investor” originated in the Broadway theatrical world, where plays were often financed by wealthy individuals rather than formal lenders, and payments were due only when and if the production was a success.

The term “angel investor” was first used by the University of New Hampshire’s William Wetzel, founder of the Center for Venture Research. Wetzel completed a study on how entrepreneurs gathered capital.

These days, Silicon Valley is the center of the angel investor’s world, and the ideas being financed are related to the internet, software, or artificial intelligence.

Angel investors have a genuine interest in innovation and a desire to be involved. Many have been entrepreneurs in the past.

Anyone who has the money and the desire to provide funding for startups can be an angel investor. They are welcomed by cash-hungry entrepreneurs who can’t get conventional bank loans or don’t want the burden of big debt until their ideas take off.

Accreditation of Angel Investors

Angel investors have often obtained accredited investor status, although this isn’t a prerequisite. Accredited investor status is a formal designation, regulated by the U.S. Securities and Exchange Commission (SEC), that gives individuals access to the private capital markets based on their assets and financial acumen.

The SEC defines an accredited investor as an individual who has a net worth of $1 million or more in assets or has earned $200,000 in income for the previous two years, or a couple with a combined income of $300,000. Applicants must also demonstrate an understanding of sophisticated investment proposals.

Angel investors usually are using their own money, unlike venture capitalists, who pool money from many investors.

Though angel investors are usually individuals, the entity that actually provides the funds may be a limited liability company (LLC) , a business, a trust, or an investment fund . These are vehicles that the investor sets up for tax purposes or legal protection.

Angel investors who seed startups that fail during their early stages lose their entire investments. This is why professional angel investors look for opportunities that have a defined exit strategy , an acquisition opportunity, or participation in an initial public offering (IPO) .

The effective internal rate of return for a successful portfolio for angel investors is about 22%, according to one study. This may look good to investors and too expensive to entrepreneurs, but other sources of financing are not usually available for such business ventures. This makes angel investments a good fit for an entrepreneur with a good idea and little or no cash to pursue it.

What Kind of Ideas Get Angel Investor Financing?

It may be most closely associated with the Silicon Valley tech industry, but some angels look far afield for good ideas to bankroll.

Ask for Funding, a site for entrepreneurs, lists recent ideas that have gotten backing from their members. They include a plan to build a franchise of archery facilities, a quick-dissolving tablet created by an anesthesiologist, and a developer of carriers for electronic instruments.

However, many of the pitches were from business owners and would-be business owners seeking to establish or expand a business. A New York marijuana dispensary wants to expand its reach. A UPS worker wants to open a franchise.

What’s the Difference Between an Angel Investor and a Venture Capitalist?

Venture capitalists deploy vast sums of cash pooled from many investors. They have big money to spend and tend to spend it only on existing businesses that they think have an opportunity to turn a substantially bigger profit. For example, they might buy a moribund retail chain with the goal of revitalizing it over the next two years.

Angel investors are a different breed. They are individuals who are looking to put their own money into good ideas at their earliest stages of becoming successful businesses. They are committing their own money in hopes of making a good idea a reality.

What Are the Disadvantages of Angel Investing to an Entrepreneur?

The entrepreneur is giving up a share of the company and its future profits in return for angel investing. Many angel investors want some control over the development of the product as well. They often want a seat on the board or its equivalent.

Angel investing has grown over the past few decades into a primary source of funding for many entrepreneurs in the early planning stages of turning their ideas into businesses. This, in turn, has fostered innovation that translates into economic growth.

For the entrepreneur, an angel investor provides a much-needed lifeline that is not available through more conventional funding sources. For the angel investor, involvement in early-stage startups has big risks but the potential for big rewards, including personal participation in an innovative project.

Angel Capital Association. “ The American Angel .”

Corporate Finance Institute. “ Angel Investor .”

U.S. Securities and Exchange Commission. “ Accredited Investor .”

Angel Resource Institute. “ 2016 Angel Returns Study .”

Ask for Funding. “ Homepage .”

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What Do Angel Investors Look for in a Business Plan?

Angel investors are individuals or groups that invest in start-up businesses in exchange for equity ownership. They are an important source of funding for entrepreneurs, but they are also highly selective about the businesses they choose to invest in. In order to secure funding from an angel investor, you need to have a solid business plan that addresses all of their concerns and shows them that your business has the potential to succeed. Here are some of the things that angel investors look for in a business plan.

1. Market Potential

The first thing that angel investors look for in a business plan is market potential. They want to see that your business has a large and growing market that is not already saturated with competitors. You should be able to clearly define your target market and explain how your product or service meets their needs. It’s also important to show that you have a strategy for reaching your target market and that you understand the competition.

One way to demonstrate market potential is to conduct market research. This can involve surveys, focus groups, or other methods of gathering information about your target market. You should also analyze industry trends and projections to show that your business is relevant and has the potential for growth.

2. Unique Value Proposition

Angel investors want to see that your business has a unique value proposition that sets it apart from the competition. Your value proposition should clearly explain what makes your product or service different and why customers would choose it over other options. This can be achieved through features, benefits, or a combination of both.

It’s important to demonstrate that your value proposition is sustainable and scalable. This means that you can continue to provide value to customers over time and that you have a plan for expanding your business as it grows.

3. Management Team

Angel investors want to invest in businesses that have a strong management team. This means that you need to have experienced and knowledgeable individuals who can lead your business to success. Your management team should have a clear understanding of the industry and market, as well as the ability to execute your business plan.

It’s important to provide detailed biographies of your management team and explain how their skills and experience will contribute to the success of your business. You should also show that you have a plan for attracting and retaining top talent as your business grows.

4. Financial Projections

Angel investors want to see that your business has a clear path to profitability and that you have a realistic plan for achieving your financial goals. This means that you need to provide detailed financial projections that show how you will generate revenue and manage expenses.

Your financial projections should be based on realistic assumptions and take into account potential risks and challenges. You should also provide a clear timeline for reaching key milestones and achieving your financial goals.

5. Scalability and Exit Strategy

Angel investors want to invest in businesses that have the potential for rapid growth and a clear exit strategy. This means that you need to show that your business is scalable and that you have a plan for exiting the business and providing a return on investment.

Your scalability plan should explain how you will expand your business and increase revenue as it grows. Your exit strategy should provide a clear timeline for when and how investors can expect to see a return on their investment.

6. Intellectual Property

Angel investors want to invest in businesses that have a strong intellectual property portfolio. This means that you need to have patents, trademarks, or other forms of intellectual property that protect your products or services.

You should provide details about your intellectual property portfolio and explain how it will provide a competitive advantage for your business. It’s also important to show that you have a plan for continuing to develop and protect your intellectual property as your business grows.

7. Use of Funds

Angel investors want to see that you have a clear plan for how you will use the funds they invest in your business. This means that you need to provide a detailed budget that shows how you will allocate the funds to various aspects of your business.

You should explain how the funds will be used to achieve your business goals and provide a clear timeline for when and how the funds will be spent. It’s also important to show that you have a plan for managing cash flow and ensuring that the funds are used effectively.

8. Risk Management

Angel investors are aware that investing in start-up businesses is risky. They want to see that you have a plan for managing risks and minimizing potential losses. This means that you need to identify potential risks and challenges and explain how you will mitigate them.

Your risk management plan should include a detailed analysis of potential risks and challenges, as well as a plan for addressing them if they arise. It’s important to show that you have a realistic understanding of the risks involved in your business and that you have a plan for managing them effectively.

9. Social Impact

Angel investors are increasingly looking for businesses that have a positive social impact. This means that you need to demonstrate that your business is committed to making a positive difference in society.

You should explain how your business will have a positive impact on the community and provide examples of how you have already made a difference. It’s also important to show that you have a plan for measuring and tracking your social impact as your business grows.

10. Presentation and Communication Skills

Angel investors want to invest in businesses that are well-presented and communicate effectively. This means that you need to have strong presentation and communication skills.

You should be able to clearly and concisely explain your business plan and answer any questions or concerns that investors may have. It’s also important to provide professional and well-designed materials, such as a pitch deck or executive summary.

In conclusion, angel investors look for a combination of factors when deciding whether to invest in a start-up business. By addressing these factors in your business plan and demonstrating that your business has the potential for success, you can increase your chances of securing funding from an angel investor.

Frequently Asked Questions

What key factors do angel investors consider while evaluating a business plan.

Angel investors evaluate a business plan based on various factors. One of the most critical factors is the team behind the business. Angel investors want to invest in a team with a strong track record of execution and relevant experience in the industry. The business plan should showcase the team’s strengths and demonstrate their ability to take the business to the next level.

Another factor that angel investors look for is a clear and compelling value proposition. The business plan should articulate the problem the business is solving and how it is better than existing solutions. The plan should also outline the target market and the potential demand for the product or service.

What are the financial projections that angel investors expect to see in a business plan?

Angel investors expect realistic financial projections that demonstrate the potential for the business to become profitable. The financial projections should include a detailed profit and loss statement, cash flow statement, and balance sheet. It should also include assumptions on revenue growth, costs, and margins. Angel investors will scrutinize the assumptions to ensure that they are achievable and realistic.

In addition to the financial projections, angel investors will also look for a clear understanding of the key performance indicators (KPIs) that will drive the business’s success. These KPIs may include customer acquisition cost, customer lifetime value, and gross margin.

How important is the market analysis in a business plan for angel investors?

The market analysis is a critical component of a business plan for angel investors. This section should demonstrate a deep understanding of the market, including the size, growth rate, and trends. Angel investors want to see that the business has identified a gap in the market and that there is a significant opportunity to capture market share.

The market analysis should also provide insights into the competitive landscape. Angel investors want to see that the business has a clear understanding of its competitors and how it plans to differentiate itself. This section should also outline the barriers to entry and the regulatory environment.

What are the common mistakes that entrepreneurs make in their business plans?

One common mistake that entrepreneurs make is not being clear about their target market. The business plan should clearly identify the target customer and the problem the business is solving for them. Another mistake is not providing a clear and compelling value proposition. Angel investors want to see that the business is offering a unique and innovative solution to a problem.

Entrepreneurs also sometimes fail to provide realistic financial projections. The financial projections should be based on realistic assumptions and demonstrate the potential for the business to become profitable. Finally, entrepreneurs may overlook the importance of the team behind the business. Angel investors want to invest in a team with a strong track record of execution and relevant experience in the industry.

What are the next steps after submitting a business plan to angel investors?

After submitting a business plan to angel investors, the next step is to prepare for the due diligence process. Angel investors will want to conduct a thorough investigation of the business to confirm the assumptions made in the business plan. This may include reviewing financial records, speaking with customers and suppliers, and interviewing key members of the team.

Entrepreneurs should also be prepared to negotiate the terms of the investment. This may include the amount of equity that the angel investor will receive in exchange for their investment and the terms of the convertible note or equity investment. Finally, entrepreneurs should be prepared to demonstrate their ability to execute on the business plan and take the business to the next level.

In conclusion, it is important to understand that angel investors are not just looking for a good business idea, they are looking for a comprehensive business plan that demonstrates the potential for success. This means that your plan should include a clear description of your products or services, competitive analysis, marketing strategies, financial projections, and a solid understanding of your target market.

Additionally, angel investors want to see that you have a strong team in place with the right skills and experience to execute your plan. They are also looking for entrepreneurs who are passionate, dedicated, and have a track record of success.

Finally, it is important to remember that angel investors are not just providing capital, they are also providing valuable advice, expertise, and connections. Therefore, it is important to develop a strong relationship with your investors and keep them updated on your progress. With a well-crafted business plan and the right team in place, you can attract the attention of angel investors and take your business to the next level.

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How to Pitch to Angel Investors

You may have sheer minutes to impress private investors, with success or failure hinging on how clearly and confidently you can deliver your presentation..

Mission accomplished. You have found what seems like an ideal match. You are ready for that first meeting with an angel investor where you get to present your business concept. How do you ensure your pitch is a turn on and not a turn off so that you get a second date or opportunity to close the deal with a written check in hand? "You won't get past first base if you can't address four areas," says Mike Levinson, managing partner and co-founder of DreamIt Ventures, a Philadelphia-based accelerator program for start-ups. An angel investor or early stage venture capitalist will look at 1) is the business idea simple enough for me to understand and buy into, 2) does it solve a problem or meet a need, 3) is it a big enough market and customer base for the idea, and 4) does the entrepreneur have the right people on the team to pull it off, Levinson explains. In essence you're selling your vision and your team. Angles tend to listen more to an exciting story about the business, while venture capitalists may pay attention mostly to the numbers, performance and traction. But given business owners generally have a window of about 15 minutes to make that initial pitch, every minute counts—and may cost money especially if you've paid to play. "A lot of entrepreneurs object to paying fees to present to private investors. If you make a bad presentation and walk away without any deal, the cost seems high," says Mike Williams, CEO of Seattle-based Reality Gap, an online game developer. "Truth be told, if I had worked with an investment bank and paid the normal 10 percent finders fee, it would have cost $450,000 to raise $4.5 million. I paid in total $45,000 in presentation fees in the first 17 months of business, which is more like 1 percent. So, if you know what you are doing, you can raise the money you need, and it turns out to be cheaper," he explains.   Which pitching tools do you need? You should be armed with a business plan that includes a well defined marketing strategy and solid financial statements. That's a given. But what do most investors hone in on when trying to decide if your business is worth them parting with their cash, anywhere from $25,000 up to $2.5 million. How you look, the way you speak, and what information you leave out during a pitch can sink the deal. "My whole focus is on trying to size up the entrepreneur," says private investor and real estate mogul Barbara Corcoran. "I am looking at how much wild enthusiasm do they genuinely have for their product. You can't fake passion," adds Corcoran, who is part of a panel of experts assessing potential business investments on ABC's reality program Shark Tank . Often on the TV show it is research and marketing facts and figures that attract the sharks and determine whether they bite. Here are some presentation pointers: How to Pitch to Angel Investors: Focus on the Money What's the No. 1 mistake entrepreneurs make during the pitch? "Rambling on about their technology or business rather than the financial opportunity—how you and the investor will make money together," says Tarby Bryant, founder of Gathering of Angels, a group of private investors and venture capitalists. For the first meeting, investors assume that the technology works. You should spend a few minutes talking about the business mechanics; an interested investor will ask for more details, says Bryant. Spell out the amounts and number of investors you are willing to sell equity. Dig Deeper: How to Evaluate Your Company's Financial Position How to Pitch to Angel Investors: Gauge Your Body Language People physically judge your acumen based on how you look. "The reality is that people do judge a book by its cover," says Corcoran. Don't get written off by an investor before you even open your mouth. Beyond the obvious, which is you should be well groomed, professionally dressed, and make direct eye contact. Be careful not to wring your hands or place them in your pockets. "A certain level of nervousness is expected but if you constantly shift on your feet this sends a signal that you aren't trustworthy, maybe you are hiding something," Corcoran adds. Dig Deeper: What Is YOUR Personal Brand? How to Pitch to Angel Investors: Watch Your Tongue Fancy talk doesn't work; it could backfire and create distrust. Clarity is the name of the game. The language you use to convey your concept ought to be concise. You don't want to come across as a slick talking salesman. Instead you want to display passion and enthusiasm. "I hear that a lot from investors, no passion from the entrepreneur," says Bryant. If you are just standing there and reading your presentation with no juice, no mojo, nobody gets excited and nobody writes a check." Communicate clearly here's my idea, this is my market, here's what distinguishes me from my competition, this is why it will be a financial success, and here's why you should invest in it, adds Levinson. Dig Deeper: Close the Deal with a Flexible Communication Style How to Pitch to Angel Investors: Show and Tell A PowerPoint presentation using about 12 slides is standard, particularly with a tech product. If you have a working prototype, show it to investors so they can see how it could actually work. If you can demonstrate your product or hand out product samples that's a plus. Discuss actual sales or anticipated orders. Also, this is where your research on testing or proving your business concept comes into play, says Levinson. Include results from surveys, focus groups, and product tests to show any customer insight you have gained. Dig Deeper: Business PowerPoint Presentation Template How to Pitch to Angel Investors: Be Prepared Anticipate questions inventors might ask. How large is your market? Who are your competitors? Why is your product better than what is already in the market? What is your customer acquisition strategy? How much money have you made? Also be prepared to provide alternate strategies, such as if advertising doesn't generate these results, we will do this. Stay cool, calm and collected. Levinson cautions don't get thrown off by a tough question. "It's better to say let me get back to you on that then to fumble for an answer." On Shark Tank investors and entrepreneurs are instructed by the producers not to speak for the first five minutes of the presentation. That moment of silence shakes some people up as they have five sets of glaring shark eyes. "This gives us a very quick snapshot of how the entrepreneur functions under pressure," says Corcoran. Dig Deeper: Start-Ups 2010: How to Launch Your Dream Company How to Pitch to Angel Investors: Provide A Way Out You need an exit strategy; how the investor will make his or her money back. "Two thirds of all the people that have ever pitched to me don't show me how I am going to make money," says Corcoran. Provide one to three year projections. If you say sales revenues, you have put yourself out of the game. "What do you think we do with the profits; we put them back into the business to meet greater demand," says Corcoran. "Investors don't want to jump in bed with you and be your partner for life." Most angel investments take seven to eight years to reach an exit where they are sold to another company or go public. Dig Deeper: Exit Strategies: What's Yours? How to Pitch to Angel Investors: Steer Clear of Common Errors Common reasons for rejecting a deal are that the valuation is too high, the management team is too thin or inexperienced, and there is no unfair competitive advantage, says Bryant. Other common reasons for rejecting a deal are insufficient growth potential and indebtedness—the entrepreneur owes a lot of money. Dig Deeper: Top 10 Mistakes Entrepreneurs Make When Writing a Business Plan How to Pitch to Angel Investors: Sign, Seal, Deliver the Deal Just because your pitch went well and an investor is willing to buy into your business, doesn't mean the deal is done. "The really hard part is closing the deal," says Williams, "tenacious follow up is critical. Return phone calls right away."   Having that second date is important to getting that check written. "Satisfy all questions and concerns. Ask for the order—the money," says Bryant. Be mindful there are obstacles that can get in the way such as a poorly written business plan or lack of the proper securities documents. Negotiating the terms of a deal will always be tricky, and disagreements about operations can be difficult to hammer out.   The longer the days are spent in closing the deal the less likely it will get done. About 66 percent of angel investments fail to return any money at all. Investors constantly have potential deals on their plate, says Corcoran, so, for every day that goes by other entrepreneurs are moving in on the investor to replace your offer with their juicier deals. Dig Deeper: What is the professional thing to do if you do not hear back from a company after several follow-up attempts?

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How to Structure Your Pitch Deck for Angel Investors

Startup investing is a high-stakes, highly competitive business. Angel investors and venture capitalists are constantly on the lookout for the next tiny startup that could strike it big. As savvy investors, however, they’re also attuned to potential issues and red flags that could dissuade them from funding your company.

The good news is that you can stand out from the crowd and make an excellent first impression by building a great pitch deck. But do you know how to create a pitch deck in the first place?

Your pitch deck is one of the most important elements when you prepare a pitch for angel investors . In this startup pitch deck guide, we’ll discuss everything you need to know.

How do you make a pitch deck for an investor?

Your first question might be: “What is a pitch deck?” In the field of angel investing , a pitch deck is a short yet informative presentation that lays out the basic details of your company. This includes your startup’s leadership team, mission, industry, products and services, high-level financials, growth strategy, and fundraising needs.

You can think of a pitch deck like a business card for your startup, soliciting interest in your company. Pitch decks provide all the high-level relevant information that potential investors need to know during the angel investment stage.

Importantly, the goal of a pitch deck is not to help you raise money—at least directly. Rather, a high-quality pitch deck will help get you to the next step: a seat at the meeting room table, where you’ll discuss funding with angel investors.

What should be in an investor pitch deck?

The role of the pitch deck is to quickly and concisely give potential investors an overview of your business. It should explain why they should fund your startup. However, there’s more to mastering the art of the investor pitch deck .

Although every startup is different, there’s a “language” that angel investors have come to expect from founder pitch decks. Your slides should contain various pitch deck building blocks that investors are looking for.

For one, most startup thought leaders recommend including a maximum of 10 to 20 slides. This allows investors to peruse it in just a few minutes. If your pitch deck is too short, you risk omitting crucial information. If it’s too long, you risk losing the investor’s attention. Including visually appealing images, graphs, and charts will also help sustain an investors’ interest throughout the presentation.

Instead of following a “one-size-fits-all” template, your pitch deck should be customized. Create different slides tailored to specific audiences. This enables you to easily swap your slides in and out to fit individual investors.

With all that said, what should you include in your startup pitch deck? Below are the essentials for how to create a pitch deck .

• Pitch deck cover: The start of your pitch deck should set the tone for what’s to come. A pitch deck cover should include your business name, logo, and contact information. It should also include a tagline and/or visual that effectively communicates your mission.
• Value proposition: Your value proposition is a short, high-level, one-sentence summary of the value that your company provides to customers. For example, saying that your startup is “Uber for X” (i.e. providing on-demand services from a mobile app) is a common value proposition.
• Business problem: Your business problem is the issue or gap in the market that your startup aims to solve. In the rest of the pitch deck, you will explain how your company is uniquely able to address this problem.
• Market opportunity: Even with a legitimate business problem, you need to prove that there is significant demand for the problem to be resolved. This slide should discuss your startup’s total addressable market (TAM), i.e. the potential revenue opportunity for your products and services.
• Solution: This slide showcases the products and services that your startup offers. In particular, discuss how customers can use these products to address the business problem.
• Business model: In this slide, explain how your company plans to make money from your products and services. It could be subscription fees, one-time purchases, advertisements, etc. 
• Financials: Although you don’t need to include a full tax form, your pitch deck should incorporate the crucial financial models for your startup. This may include your cash flow statement, income statement, and sales and growth projections.
• Competitors: Every business has its rivals, and a careful understanding of the market landscape is critical. This slide should discuss your closest competitors and why customers will patronize your business instead of theirs.
• Leadership: This slide is the place to mention key startup personnel such as founders, co-founders, and executives like the CEO, CTO, and COO. Mentioning your credentials and previous experience helps reassure potential investors that you have the skills to back up your business vision.
• Fundraising: Last but not least, your pitch deck should conclude with  the amount of funds your startup is seeking. You should also discuss how you plan to use these funds (e.g. hiring new employees or developing a new product).

How do you pitch an angel investor?

Sending out your startup pitch deck is the first stage in pitching an angel investor. Typically, your deck should be attached to a brief message (e.g. through email, LinkedIn, or the investor’s website) that succinctly presents your case without directly asking for funding.

If your pitch deck is well-written enough to generate interest, the next step is for investors to reach out to you for a one-on-one meeting. This meeting should further build on the themes outlined in your deck. This includes the business problem, the market opportunity, your business solution and products, your financial models, etc. Put forth a concise and winning argument for investing in your startup, and be sure to leave time at the end for Q&A.

Presenting to VCs and angel investors is its own skill, and you may need to go through many presentations and meetings before you get a nibble of interest. Once an investor wants to move forward, the next step is to go through the due diligence process. During this stage, investors may assess your company in terms of factors such as:

• The competency of the management team.
• The quality of your products and intellectual property.
• The long-term potential and market opportunities for your startup.
• The underlying assumptions of your company’s financial models.
• The risks and competitors that your startup faces.
• The possible exit strategies for your startup.

Your Pitch Was Rejected? Rebounding from Investor Rejection

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Stock market today: US stocks close mixed but gain for the week as the AI trade stumbles

• US stocks finished the week higher even as the AI trade showed signs of exhaustion.
• The Dow Jones led with a 1.5% gain this week, while the S&P 500 and Nasdaq 100 were up about 0.5%.
• Some economists are calling on the Fed to cut interest rates in July as the risk of a recession grows.

US stocks closed mixed on Friday but finished the week higher even as the artificial intelligence trade showed signs of stumbling.

Leading the market higher this week was the Dow Jones Industrial Average, which was up nearly 2%. The S&P 500 and Nasdaq 100 finished the week higher by about one-half of a percent.

The meteoric rise of Nvidia stock took a breather on Thursday and Friday, with the stock down about 10% from its intra-day high of $140.76.

Other hot-AI stocks like Broadcom , Dell , and Super Micro Computer also fell between 1% and 3% in Friday's trading session.

Investors are paying close attention to new economic data, as murmurs grow of a potential interest rate cut from the Federal Reserve in July following a spike in weekly jobless claims.

A July interest rate cut currently has a likelihood of just a 10%, according to the CME FedWatch Tool, though one economist sees the odds of a cut at the July policy meeting closer to 60%.

Such a move by the Federal Reserve would be to ensure that an economic recession doesn't happen as inflation shows continued progress in falling.

Economist Claudia Sahm told CNBC on Friday that the Fed was "playing with fire" by keeping interest rates higher for longer.

"My baseline is not recession," Sahm said. "But it's a real risk, and I do not understand why the Fed is pushing that risk. I'm not sure what they're waiting for."

Here's where US indexes stood at the 4:00 p.m. closing bell on Friday:

• S&P 500 : 5,464.63, down 0.16%
• Dow Jones Industrial Average : 39,149.64, up 0.04% (+15.87 points)
• Nasdaq composite : 17,689.36, down 0.18%

Here's what else happened today:

• America's 'cardboard-box recession' is finally over, according to Bank of America.
• These four US regions will likely see big electricity bill increases this summer, according to the EIA.
• The US debt will soar to $56 trillion in the next 10 years as government spending continues to outpace revenues, according to the CBO.
• Apple stock received two price target increases to $240 per share on Friday, representing potential upside of 14% from current levels.
• A combination of AI and robotics will help catapult Tesla to a $1 trillion valuation, according to Wedbush.

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil dropped 0.78% to $80.66 a barrel. Brent crude , the international benchmark, was lower by 0.60% to $85.20 a barrel.
• Gold declined by 1.46% to $2,334.50 per ounce.
• The 10-year Treasury yield was flat at 4.26%.
• Bitcoin dropped 1.25% to $64,034.

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U.S. Moves Ahead With Plan to Restrict Chinese Technology Investments

The Treasury Department unveiled rules to curb financing of Chinese semiconductors, quantum computers and artificial intelligence systems.

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By Alan Rappeport

Reporting from Washington

The Biden administration on Friday outlined its plans to curb new American investment in critical Chinese technology industries that could be used to enhance China’s military, further straining economic ties with Beijing at a time when trade tensions are rising.

The proposed Treasury Department rules would prohibit certain U.S. investments in Chinese companies that are developing semiconductors, quantum computers and artificial intelligence systems. The Biden administration is trying to restrict American financing from helping China develop advanced technology that could be used for weapons tracking, government intelligence and surveillance.

The regulations are expected to be finalized later this year. They come nearly a year after President Biden signed an executive order calling for the investment ban, which will largely affect venture capital and private equity firms that do business with Chinese companies.

“This proposed rule advances our national security by preventing the many benefits certain U.S. investments provide — beyond just capital — from supporting the development of sensitive technologies in countries that may use them to threaten our national security,” said Paul Rosen, the Treasury Department’s assistant secretary for investment security.

The restrictions require investors to notify the Treasury Department about certain kinds of transactions, and some types of investments are explicitly prohibited. As part of the program, the Treasury Department has the power to force a divestment and violations could be referred to the Justice Department for criminal prosecution.

The rules apply to equity investments, debt financing that could be converted to equity, and to joint ventures.

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Empower Sued Over Pension Plan Termination Investment Advice (1)

By Jacklyn Wille

Empower Retirement LLC was sued by an Illinois senior living facility that said a subsidiary of the retirement plan recordkeeper gave faulty investment advice that caused steep losses when the facility terminated its pension plan.

Tabor Hills Senior Living Campus hired Global Portfolio Strategies Inc. and its former corporate parent, Prudential Retirement Insurance & Annuity Co., to provide investment advisory and other services in connection with the facility’s pension plan, according to the lawsuit. Tabor Hills says that after it began the process of terminating the plan in 2021, Global Portfolio moved the plan’s equity investments into imprudent long-duration bond ...

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Canadian insurer Manulife sets cash target ahead of Asia investor day

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‘Black Women Are A Good Investment’: Inside Goldman Sachs’ $10 Billion Economic Plan

The wall street giant says it sprinkled nearly $3 billion in capital to expand the black business community..

“Y our network determines your net worth.”

The opening words inspired the 300-plus people at Goldman Sachs headquarters in New York on June 18. It was a part of the video shown to the investment bank’s fifth graduation class of the Black in Business which is apart of the One Million Black Women initiative, a $10 billion investment Goldman Sachs says is aimed at driving economic opportunity for one million individuals by 2030. In the crowd were lawyers, accountants and even a NASA statistician—all future entrepreneurs ready to receive their stamp of approval from the financial titan.

“Our thesis is that Black women are a good investment,” Asahi Pompey, president of the Goldman Sachs Foundation, tells Forbes .

Pompey discussed Goldman Sachs’ One Million Black Woman initiative as part of “ Journey to ForbesBLK Summit,” an editorial series leading up to the second annual ForbesBLK business conference in Atlanta on June 23-25. There, ForbesBLK plans to amplify entrepreneurs and organizations who take distinctive approaches to leadership, business and economic problem-solving.

Goldman Sachs says it has deployed nearly $3 billion in capital for One Million Black Women since its 2021 launch. Its “Black in Business” education course, designed to help sole proprietors scale into employers, has credentialed 750 Black women, including the 146 individuals in its fifth cohort on June 18. Black in Business is a free program and serves as the foundation of One Million Black Women because it may help close the wealth gap and grow the U.S. economy by adding jobs in the Black community. Goldman Sachs works with New York University’s Stern School of Business to curate a 10-week virtual business course covering topics including consumer acquisition costs, marketing strategies and staffing.

“Our big task is to move solopreneurs to bonafide entrepreneurs who have employees and others who are helping to achieve their business goals,” Pompey says.

The investment bank says businesses have made $22.4 million in revenue since it created Black in Business. Goldman Sachs CEO David Solomon told attendees that 65% of graduates reported an increase in revenue after six months, and 50% added employees.

Hyacinth Tucker, 49, founder and CEO of The Laundry Basket, described the Goldman Sachs program as challenging but also “impactful.” A former Allstate insurance agent, Tucker applied for Black in Business in 2023 to assist in scaling her Maryland-based laundry service. The course improved Tucker’s accounting skillset as she manages new contracts, including one with the U.S. Department of Defense.

“It changed me,” Tucker tells Forbes . “But you have to be accountable. You have to submit the homework, (financial) work, and everything that comes with it.”

Sandra Jean, CEO of the law firm Jean Consulting Group , completed the program in March 2023. A former National Labor Relations Board attorney, she opened her Atlanta-based firm in February 2022 and recalls making less than $2,600 monthly. “I didn’t know how to price myself,” the 53-year-old Jean says. “Who was my target audience? All these things I never thought of, being an employee.”

Jean Consulting Group’s revenue increased nearly 500% over the last year, Jean estimates. The jump allowed her to pay off a mortgage and plan for the future.

“I can see myself leaving a wealth legacy for my children,” Jean says.

Executive Decision: Goldman Sachs CEO David Solomon joined the firm's fifth Black in Business graduation ceremony honoring women-led firms.

‘It’s A Proven Model’

Goldman Sachs created One Million Black Women after its March 2021 report, Black Womenomics . It found that the wealth of a median single Black woman was 92% less than that of a single White man. To help resolve this imbalance, Goldman Sachs replicated its 10,000 Small Businesses program for Black in Business. In 2008, the investment bank established the 10,000 Small Businesses program to teach enterprises business economics and scaling. It’s since impacted more than 14,000 businesses in urban and rural communities.

“It’s a proven model,” Pompey says.

Goldman Sachs estimates closing the earnings gap for Black women would add 1.7 million U.S. jobs and $450 billion to the national economy.

Pompey works closely with Goldman Sachs’ urban investment team to direct funds to venture firms, such as Atlanta-based Collab Capital, that put money into Black-owned startups. Goldman Sachs also steers funds to public-private partnerships, including New York City’s $75 million small business opportunity fund.

Goldman Sachs also says it deployed $39 million in grants to institutions, such as Morehouse College’s School of Medicine, to focus on maternal healthcare. Atlanta’s The King Center program to mentor girls interested in economic advancement were among those also receiving grant money. Goldman Sachs says it plans to spend $100 million in philanthropic funds.

Pompey says the initiatives serve as a “one-two punch” to combat the opportunity gap. And in September, Goldman Sachs will increase its graduating class to 300 from 150 individuals. Pompey says that before graduates get their Goldman Sachs degree, they’re required to present at least one growth idea for their business.

“The secret sauce,” Pompey says, is that Goldman Sachs tracks the progress of all businesses until 2030. That data, she says, “will show where they started as a solopreneur and how that business grew.”

Tucker, a keynote speaker at the graduation, wants to expand her business to Canada and has plans to start franchising. “Watch out Wall Street. We’re coming for you,” Tuckers says, closing the speech to an applauding crowd that included Goldman Sachs’ Solomon and Valerie Jarrett, CEO of the Obama Foundation.

Reflecting on her own entrepreneurial journey, Jean says she hopes the networking and course work provided by the program can break a negative trend of 90% of Black businesses failing after three years.

“We need knowledge,” Jean says. “We have the volition, but we’re operating in a vacuum. We don’t know what we don’t know.”

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