Learn about the 4 insightful ways to attract angel investors as a startup in Nigeria. Angel investors are rich people who invest in startups. They help startups grow through their investments. They are interested in investing in startups that have great ideas that can fetch returns and make their money back.
Therefore, have you always wondered how to attract angel investors as a startup in Nigeria but found it difficult? Most startups struggle to attract angel investors to know more about their business because they don’t know the right way to approach them. Well, this problem may be solved after reading this article.
Who are the Angel Investors
Angel investors are the risk-takers who invest in startups and growing businesses. They don’t mind losing their wealth in exchange for a return that exceeds the normal investment possibilities in Nigeria.
In layman’s terms, they take risks while aiming to hit it big. Now that is a gamble anyone can make if they want to turn their ideas into reality. The most common question among entrepreneurs who seek these investors’ help is what makes an investor decide “yes” or “no.”
Top 4 Ways To Get Angel Investors Willing To Invest In Nigeria
There are 4 insightful ways to attract angel investors as a startup in Nigeria, which comprise individuals who invest in business firms or projects, generally in exchange for convertible debt, preferred stock, or a share of the individual. They are:
1. Identify the right Angel Investors that suit your business
Go for angel investors that befit your business venture. Angel investors have the expertise, authority, and networks in certain business areas and invest in these sectors or models.
It will pay you more when you know the kind of investors you want to meet and then you can design your pitch to suit these kinds of angel investors.
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2. Creating an avenue for value and reach
Creating value is one of the 4 insightful ways to attract angel investors as a startup in Nigeria. Angel investors always look out for businesses to add value and reach, so as to achieve several returns on a diversified portfolio.
They can decide to take an interest in different categories of the business. This would provide them room to add value to your startup and give them the desire to make more money by investing more.
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3. Get your value and arts right and implement it
Angel investors seek startups who not only talk about their ideas but also lead a team who implements the business to yield high returns. To start this, you must present them with a strategic execution of your plan.
I believe many startups are always not ready with pitching to an angel investor. They believe that they have brilliant ideas, but executing and implementing the plans is difficult for them. To achieve the best results and understand what investors are after, you need to go the extra mile in your preparation. Preparedness helps you navigate the storm to get the offers you need.
4. Make the pitching Count
Making your pitch count is one of the 4 insightful ways to attract angel investors as a startup in Nigeria. Angel investors don’t really need to see a finished product before they can invest. But it is also wise not to go to them with just the words of your mouth and not a viable product to show.
I don’t think any reasonable investor would be willing to release millions of naira to you based on your word of mouth. Be smart and be ready to take the bull by the horn. Try even if you have failed a thousand times. They need action, not words. Make your moment with them count!
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What you need to know about Angel Investors and startups attracting them
Start-ups are a risky investment to make and most entrepreneurs have tried and tested the bootstrap method of generating profits. In Nigeria, it is even more difficult for start-ups to attract angel investors for several reasons. Which includes lack of preparation, no viable product to show, just words of mouth, not making the pitching count, and so on.
While we have seen the emergence of some high-profile start-ups in Nigeria, many would agree that the number one necessary thing to being a successful entrepreneur is money. And specifically, “Angel Investors” who are ready to invest in your idea. How do you bring these types of people into your start-up? Thus, as an entrepreneur attempting to bring your business idea to fruition, you need to be abreast with current trends and make proper plans for attracting them to your business.
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13 Other ways to attract investors
While Venture Capitalists are the only type of angel investor that commands lofty valuations, there are other options to consider if you are a Nigerian startup. There are other ways you can attract angel investors if your startup is in Nigeria.
- Carry out your homework and make proper plans
- Find a strategic planning method
- Create a business plan and financial models to follow
- Write out a set of key milestones to reference to
- Write a story that captures the problem your business solves
- Write an angel investor presentation and pitch deck
- Put more effort into extending your network
- Show evidence of your work or business to angel investors
- Personalize your pitch and presentation
- Select co-founders intelligently
- Define and refine your business first
- Build a positive and strong brand online presence
- Think beyond your business scope with angel investors.
What are investors most interested in?
A lot of things highly captured investors in your business. They are interested in:
- Market Size
- Your business’s current position within the market
- Your key customers or suppliers
- The key value point of your business and its aim.
- The outside scope of your business and what your business would look like in years to come.
- How your business can solve the world’s problems
- Exit Strategies for their investments and
- Comprehensive risk analysis.
Basically, angel investors are also about the 4Ps of marketing, i.e.
- Price
- Product
- Placement
- Promotion.
But rarely do we hear about the activities of Angel investors in these 4Ps and how they are the early stage investment groups.
How Startups Operate while finding Angel Investors in Nigeria
Most start-up founders in Nigeria, during their quest to raise funds, fall into one of the two categories:
- Those who aren’t sure they want to fund at all, and
- Those who want it but at the same time are scared out of their minds. They are uncertain and fearful since there is a lack of information or understanding on how Angel investors operate in Nigeria.
Well, it is pertinent you note that angel investors are interested in everything about your business and how they can generate income from it.
How do investors find startups?
Have you always wondered how angel investors find startups in Nigeria? Most startups struggle to attract angel investors because they don’t know the right way to approach them. But angel investors can find startups through:
- Savings or thrift unions
- Friends and family
- Crowdfunding
- Their fellow angel investors
- Venture capital
- Bank loans, and
- Small business administration loans.
Conclusion
Angel investors will demand to be taken care of by the start-up they invest in. If the startup doesn’t meet all the terms of the agreement, then they have the chance to pull out their investment in full without being pressured. They are looking for investments that will give them large returns for minimal or no work at all on their part.
They are also looking for exit strategies and structured risk analysis before you can collect their money. With the right outlook, even if you are young, it is possible for you to get capital for your business from these angel investors.
