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This article is part of the Step-By-Step Guide To Validating And Launching Your App Idea post, originally published on Y Media Labs blog.
Angel investors are wealthy people who fund startups and businesses in exchange for, usually, a bit of ownership equity. They really want to see your product or service succeed, so they’re investing in you and your brand more than for personal profit.
If you go this route and get an injection of funding, you’ll be giving up some ownership, so you have to weigh that against being able to be fully independent with the vision for your app. Even if you lose some say in its direction,if you can obtain funding to market your app and run its business, the tradeoff might be worth it.
If you want to approach angel investors — and there’s certainly no harm in trying — finding them in the first place is often a matter of perseverance, as they don’t advertise their services very openly. Here are good resources:
- Some angel investors actually band together and host showcase events where entrepreneurs can meet them in person. One such example is Funding Post. You’ll have to pay to attend, but it’s worth it to have this kind of all-in-one-place access. Just have your elevator pitch ready.
- Another good bet is the Angel Capital Association, which is a professional association that offers budding entrepreneurs an insider’s look into how angel investors think. Getting your hands on this valuable info can make the difference in being able to put together a successful pitch.
- Angel List is a directory of sorts that makes it easy for you to find angels in your region of the country. This is a valuable resource, as angels usually prefer investing in startups located in their local area.
Angels don’t hand out their funding easily, so you’ll have to learn to deal with rejection pretty quickly. But it’s important to note that getting rejected repeatedly—even if you go through 10 angel rejections—doesn’t necessarily mean anything significant. Many angels aren’t trained to evaluate business ideas. They are simply successful and wealthy individuals who want to make their money work for them by finding a promising startup in which to invest.