Some
of the most important individuals a small business can use to improve are angel
investors. According to author Jacoline Loewen, angel investors “fill the gap in seed funding between ‘friends and
family.’” Angel
investors typically use their own money to fund businesses, therefore expect
high returns to their investments. Two
of the best angel investors today are Reid Hoffman and Ron Conway.
Reid
Hoffman was born in Palo Alto, California in 1967. In 1990, Reid graduated from Stanford
University with a Bachelors in Symbolic Systems and Cognitive Science. Reid then, in 1993, earned his Masters in
Philosophy from Wolfson College, Oxford University. His first company, SocialNet.com, opened in
1997, which focused on matchmaking people with similar interests, as well as
dating. He was also a member of Paypal’s
founding board of directors. In fact,
Reid left his company to become Paypal’s COO in 2000. His biggest invention was the website
LinkedIn. His investment portfolio includes Flickr, Last.fm, Facebook and
Zynga.
On
inc.com, Reid gave five tips to “ace your investor pitch”:
1.
Prove
your business
2.
Show
one revenue stream
3.
Sidle
up to another successful company
4.
Expose
your risks early
5.
Every
investor is not the right investor.
These tips are key because if you do not
highlight your business or risks before an investor jumps on board, then it
leads to investors either not agreeing to help the business or pulling out
because the risk becomes too much to handle.
Ron Conway was born in San Francisco in
1951. Ron graduated with a Bachelors in
Political Science from San Jose State University. Ron, according to Miller Gold Partners, “sees
practically every startup deal and has used that power to his advantage,
investing in many of the most important startups of the past decade, including
Google, PayPal, Facebook, and Twitter.”
Techcrunch.com writer Kyle Russell did an
interview with Ron, in which he gave the following tips to young business
founders finding investors:
1. “Idea has to be infectious
enough to find a co-founder.”
2. Background is not the
motivating factor: it is the circumstances that led to the startup’s creation.
3. Recognize and adapt to a product
not finding a market.
These tips are critical because a business
owner needs to be both comfortable with their co-workers and what the business
as a whole is about. If the owner does
not follow the market their product is for, it could potentially lead to a loss
of business, which is a huge risk in the eyes of investors.
For my business plan, I really relate to
proving the business, exposing the risks, and recognizing and adapting to a
product not finding a market. Since my
business is focuses on making videos and putting them on Youtube, I first need
to find the market I want to watch my videos.
Once I recognize the market, I can adjust my business accordingly. Proving the business is going to be the most
important tip to follow. The market for
Youtube videos based on video games is already crowded, so I need to find a way
to distinguishing this company from the rest.
I also need to prove that my company is better than the already
established companies.
