All businesses start out as a small seed, an idea that gets nurtured and, ideally, that grows into a profitable venture. In order to get this growth to happen, your small business will likely need to seek outside funding to start working. Depending on the nature of your business, the most logical route or option is to get help from angel investors. Without the money these investors provide, it can prove difficult to start your business if you’re unable to obtain other sources of funding. Read on to learn more about finding angel investors for your small business.

What is an Angel Investor?

An angel or angel investor is a person who, being in a solid financial position, invests money of his or her own to your business (most often a start-up). The fact that angel investors invests their own money and don’t generally provide a large amount of funds is largely what distinguishes them from venture capitalist. An angel investor also usually isn’t just in it for the money; he or she often invests due to personal interest in an industry or to give back to the community. In return for the investment, an angel investor usually gets an equity share in your company. You can use angel funds to get your business off the ground, or to make it past a rough financial patch.

Why is It Important to Find Angel Investors?

You might not qualify for a regular small business loan. Banks are often reluctant to approve them, largely because small businesses have a greater perceived risk and much less, if any, collateral to offer. At the same time, your friends and family probably do not have the amount of money it will require to support a small business venture fully. Finding angel investors provides a solution because they allow your small business to secure the financing that can stabilize the company and help it grow large enough to qualify for venture capitalist investments or bank loans.

How do You Find These Investors?

If you need just a small amount of money to get things going, then one option for finding angel investors is simply to network through people you know, as most angels put their money into businesses that are aligned with their interests or local to them. Talking to attorneys who work with equity investment bankers, accountants, financial planners, business counselors, and even economics instructors will often yield good results. Sometimes, other people in your area who have received angel or venture capital investments can put you in touch with someone who can help. Even when their investor isn’t able to provide funds to you directly, they often know of someone who is. Business-related organizations, such as your local Chamber of Commerce, also have information about angels operating in your area.

When Should You Try to Find Angel Investors?