You’re ready to take your business online but…
Here’s the problem: You’ve got a good product or service, but your brick-and-mortar shop is not bringing in the bucks. You know need a boost by adding an online store, but you can’t come up with the capital to get it started.
There are economical ways to get websites up and running, including designing it yourself and taking advantage of free software and online products, but the truth is that most businesses do require some overhead to go online. There are expenses such as manufacturing, inventory and storage, and you may need to pay for advertising to draw traffic toward your site. You may also need to create an online catalog, which can cost tens of thousands.
You’re ready to go to the bank, but…
Banks are conservative at any time, but with the busted economy getting a business loan to expand on a struggling business is… well… not going to happen.
IT MIGHT BE TIME TO CALL ON AN ANGEL
Yes, of course you can get down on your knees and pray, but that’s not what I’m talking about. In the world of internet business an ANGEL is actually a private investor. ANGELS are banks or venture capitalists. They’re private investors who often work in small groups and they put up money for small businesses, most often internet ventures.
ANGELS are unique in that they tend to bridge the gap between small personal loans, like from family members, and the massive capital investing of venture capitalists. They lend directly to the entrepreneur (you) and hold a stake in your business. Generally they’re willing to hold out as a long term investment and don’t demand interest only monthly repayments.
WHAT YOU CAN EXPECT AN ANGEL TO EXPECT
ANGELS aren’t charity organizations, they’re in it to make money. They silent-partner with business owners to generate income without the labor that a business owner must invest. They’ve seen enough internet businesses go bust to perform due-diligence before making an investment. You’ll be expected to:
- Give up a substantial percentage of ownership to them.
- Present a highly developed business plan.
- Demonstrate your experience and product quality.
- Come up with an exit strategy—and end date to when you expect to buy yourself out of the partnership.
WHERE YOU CAN FIND YOUR ANGEL
Often, the key to getting into the door of an ANGEL or group of ANGELS is to share something in common with them. It could be as simple as getting the word out with church members or the local Chamber of Commerce. Look to classified ads for investors, or post your own ad. I found my ANGEL by posting a Craigslist ad.
There are online avenues for finding ANGELS as well. Try:
- Investor’s Circle
- Go Big Network
- Network of Business Angels and Investors
If you believe that going online will give it the jump start you’ve been desperately hoping for, there is likely an ANGEL that will stand behind you. Giving up a share now may seem painful, but remind yourself that your ANGEL wouldn’t be offering you the capital if he didn’t think he could profit from it. What you give up now will very likely lead to financial freedom in the not-so-distant future.