Commentary
You’ve done everything you should to interest angel investors in your hot company, but how do you get them to pull the trigger and invest?
You already know what it takes to attract investor interest: Build a great product for a large market, recruit a great team and set up a blue-ribbon board of advisers, file patent applications, sign up customers and partners, showcase all of the above on a good website and investor PowerPoint, and prepare reasonable offering documents. You even have had great meetings with potential investors who say they want to invest, but it’s taking forever for the investors to send in the checks and wire the funds. What do you do?
Here are three ways to get angel investors to pull the trigger faster:
- Have a smaller offering or offering range, but allow for the board to expand the size of the raise.
- An over-subscribed offering can make your company look like a winner, while an under-subscribed offering can make it look like a loser.
2. Create competition for the investment slots and a sense of urgency.
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- Issue warrant terms that are less generous over time (e.g., 20 percent warrant coverage if you purchase by June 30, 15 percent if by July 31, 10 percent if by August 31).
- Provide for similar increasing stock pricing to encourage early purchasing.
By targeting angel investors with the right terms the right way, business founders can overcome the slowdown in venture capital.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
