When you think of an angel investor who comes to mind?
Maybe an executive who worked 20 years in an investment bank and now has £100,000s to invest or an eccentric billionaire who sold his Crypto startup for millions and is now advising the next big startup in Artificial Intelligence?
We all have different pictures and ideas of what an angel investor looks like but one thing is for certain you might think: as an angel investor I need A LOT of money before I can invest.
What if I told you that this is not the case? Through things such as Special Purpose Vehicles (SPVs), syndicates and crowdfunding angel investors are now people who invest as little as £1,000. There is a new breed of angel investors emerging and there is something that founders need as much as money when fundraising: Value add investors.
Check out this instagram video where our founder Andy Ayim MBE discusses how you can add value as an angel investor who wants to invest £1,000 in a startup. Some of these include helping the team with hiring, fundraising, connecting to customers and many more things.
Here are 5 additional tangible ways you can add value as a small ticket investor:
1. Mentorship and Guidance
As an angel investor, you most likely have expertise in a certain industry or field. When investing in a founder who is in a similar industry to you, offer your expertise and industry knowledge to the founders. Act as a mentor and provide guidance on strategic decision-making, product development, market analysis, and scaling the business. Share your experiences, successes, and failures, and help them avoid common pitfalls. This will make you invaluable as an investor and you would be surprised to hear how much founders value these insights.
2. Introductions and Networking
We all have a network. One way to support founders beyond money is to leverage your network to connect founders with potential customers, partners, or other investors. Introductions to key industry players or potential clients can significantly boost a startup’s growth prospects and support founders in their journey to becoming the next unicorn.
3. Operational Support
Founders have a very limited amount of time and resources. Another way you can support founders is by providing hands-on assistance in day-to-day operations or specific areas where you have expertise. This could include marketing strategies, financial planning, recruitment, or optimizing internal processes. This is something founders would find invaluable.
4. Access to Resources
As mentioned above, founders at the beginning of their journey are usually very resource constrained. By utilising your connections and resources to help the founders access necessary tools, software, or services you can significantly accelerate the startup’s growth. This can be done by offering or finding discounted or preferential rates for essential business services to the founder, which can significantly reduce their operating cost.
5. Performance Tracking and Accountability:
Setting clear goals and milestones is essential for any startups and you’d be surprised how often founders request your support by simply keeping them accountable. Make sure, however, not to overwhelm them constantly with requests or updates but offer your support and constructive feedback when appropriate to help them keep on track. This will help the founders stay focused and aligned with their growth objectives.
I hope this article teaches you that large sums don’t make you an angel investor and that angel investing is not simply about money. There are many different ways to be a useful and successful angel investor as shown in the examples above.
What are your value adds?
Want to learn how to become a value add angel investor?