Angel Investors are considered by many to be the best type of investor in your business. Angels are usually successful business owners and entrepreneurs who can also bring you valuable industry experience, executive knowledge, creative ideas and contacts. They can usually afford to indulge their love or risk and are often seeking new business challenges. To be an angel in the USA, one must be an "accredited investor," which the Securities and Exchange Commission defines as someone with a net worth of at least $1 million or an annual salary of at least $200,000. Similar rules exist in other countries.

So how do you attract and investor to your business and are they really what you want?

Build a Convincing Case: Angel investors may be willing to take on more risk than most, but they still need to see a well thought out business plan with a proven product that has a recognizable and eager market need backed by a competent management and development team.

Establishing Your Market: Your angel will need to be convinced that your business will meet the market need and that there is a clear barrier to entry from competing companies. They will hardly want to invest in your company only to see your marketing advantage disappear. Typical barriers to entry are: patents, cost of development and proprietary processes.

Your Management Team: Angels they will want to know that their investment is in safe hands. They will want to know the quality and experience of your managers and that they are all committed to your company.

A Great Business Plan: This defines your business, market, potential customers and your goods and services as well as the strength of your management team. It lets your angel have a good idea of your financials and how they will profit from investing in your business. Your business plan is not only a great selling tool it also assists you in planning and developing your business, placing it on a firm foundation. Consider using a professional business planning service for this. Not only will they work with you in producing a great business plan, but a good company will identify your business weaknesses and suggest better ways to do things. By a good business planning company that is not one that charges less than $500 youll get a plan and nothing more. Look for a company that charges a rate that allows them to offer you consultancy, advice and assistance as well.

Put Your Money where your Mouth is: If you want to start a business, be prepared to invest your own money. Entrepreneurs who expect angels to risk money in their venture, should be as confident about their own money. Entrepreneurs who are not willing to assume such a risk are not considered serious by investors and will probably not receive funding.

Find the Right Angel: Angels typically invest in companies that they know something about. Identifying appropriate angels will increase your chances of success. When pitching, ask them what they look for in a company, how much they typically invest, what kind of return they expect on their money.

Expect the Angel to be Involved: Entrepreneurs should also be choosy about whom they take money from. Make certain that you really know your Angel, understand their motivation and expectations for exit strategy and ROI (return on investment). Your angel will probably want a seat on the board and definitely a say in how you spend their money. Be prepared for this not only do they need to protect their investment but they also will have knowledge and experience that your company will greatly benefit from. Being able to answer angel questions without feeling threatened is crucial to building a professional and mutually profitable relationship. Knowledgeable angels with good connections can jump start a company and keep it thriving. Well-connected angels can even make it easier to get additional rounds of financing including venture capital.

Professionalism Persistence and Patience: Raising capital is a time-consuming, ego-challenging process. It is not unusual for a startup entrepreneur to spend 50%-70% of his time raising capital from angel investors, a process that can average 3-6 months and in an uncertain market, it take even longer. Efforts to horde stock, inflate valuations or produce unbelievable financials will make the company less attractive to suitors. Let experienced professionals - produce your financials and manage your legal activities.

Lastly entrepreneurs must be determined, passionate about their business and thick skinned. Remember this and good luck.

Lee Lister

Lee Lister is Management Consultant and Program Manager with more than 25 year's management and consultancy experience and more than 20 year's program and project management experience in projects for Banking, Finance, Insurance, Leisure and Government bodies. She also have more than 10 years bid management experience ranging from bids for medium companies to large international and infrastructure bids.

British born, Lee received her BA(Hons) Financial Economics from the University of Essex. She went on to work in or for a considerable number of countries within Asia and Europe as well as Australia and the United States. While building a name for herself through helping company restructure, change management and project management consultancy, Lee became a well-known figure for her skills in analyzing, problem solving and trouble-shooting. She has consulted for many major industries, including banking, telecommunications, insurance, transportation, leisure and governments from many different countries. Some of the companies who have benefited from Lee?s expertise are Hewlett Packard, Siemans Nixdorf, Electrolux and the Philippines government.

Whilst working in the Far East she became a recognized expert on preparing and evaluating large World Bank Proposals (infrastructure projects within developing countries). These accomplishments called upon the skills of bid and project management, risk assessment, contract negotiation and supplier management and required dedicated work to very tight time scales. This expertise was acknowledged by an invitation to be the principle speaker at an International Business Development Conference in Washington, USA. She has also consulted at very senior level in several countries.

She owns and manages two companies, Biz Guru LLC in the USA and Biz Guru Services Ltd in the UK as well a considerable number of profitable web sites. She works almost entirely via the internet, visiting clients on site during major consultancies and training. Her Internet skills span from when major companies first started to consider obtaining their own web sites. During these years, she has kept up to date with the rapid changes on the internet, including the dot com boom and the resulting bust ? which her own web based companies survived.

She regularly consults, writes and lectures on business, bid management and marketing and has published numerous courses and books.