Dan Lok Shares 11 Ways Angel Investors Can Change Your Startup for the Better, A DotCom Magazine Exclusive

Dan Lok Shares 11 Ways Angel Investors Can Change Your Startup for the Better
Dan Lok Shares 11 Ways Angel Investors Can Change Your Startup for the Better

Dan Lok Shares 11 Ways Angel Investors Can Change Your Startup for the Better

When companies are just getting started, they are often in need of funding and advice. As companies emerge from the seed stage, they need cash infusions in order to develop their products and study the market. Angel investors can step in and help companies become stronger, helping to arrange how the new business works.

An angel investor is a person or group with well-established financial resources. With deep-pocketed resources, investors can help to fund new companies or expedite the growth of an established business. Angel investors are looking for a high return on their investment and a degree of control over the business.

Dan Lok, a business and technology expert, shares 11 ways in which an angel investor can change your startup for the better.

1. Obtaining Financing Without Taking on Debt

One of the biggest advantages of angel investing is that companies can receive financing without having to take out loans. It can be challenging for new businesses to make a case to a bank that they need the money and that they can pay it back. Unproven business concepts are likely to be looked at with prejudice. An angel investor is taking a greater risk than a bank, but they can afford to do so, and, in many cases, they receive high returns.

2. Providing Mentorship

Angel investors are generally highly experienced in the business. They can help a business by providing mentorship. They have a stake in the business’s success, so they are motivated to give help and guidance. Startups backed by angel investors are more likely to experience substantial growth and experience greater rates of return. They are also less likely to go out of business in the early years of their enterprise.

3. Achieving Credibility

When a business is involved with an angel investor, they receive credibility based on the strength of the investor. When customers and investors know that the company in question is backed by an angel investor, they will be more likely to trust that the company will be around for the long haul.

4. Greater Professional Networks

Angel investors are often able to offer access to their network of professional connections. They may know of potential employees or customers. They may also have connections with accountants, lawyers, investment bankers, and other professionals that can help a business become established.

5. Industry Knowledge

Angel investors typically specialize in a certain type of company. Since they have worked with similar companies in the past, they will have industry- and niche-specific advice. They can give marketplace-tested knowledge and strategy to the fledgling company.

6. Helping to Build a Management Team

Angel investors usually place a high value on the strength of a company’s core team. They can help companies find these crucial staff members and develop their connection with the market. They may be able to find C-suite staff in unexpected places, increasing the company’s reach.

7. Encouraging Growth

Angel investors want to see a large return on their investment. When they invest in a company, they can use their considerable resources to encourage growth. Understanding how to foster growth is one of the major advantages of working with an angel investor.

8. Quicker Approval

Once a company finds an angel investor, the process of making the arrangements for funding is easier than working with a bank. A bank will require much more documentation on the specifics of the business and will not want to deal with a company at the seed stage. Angel investors are better prepared to deal with emerging companies and will bring money into the business in a more efficient fashion.

9. A Personal Touch

An angel investor can help a company through difficult patches. With a personal touch, the angel investor may be able to steer the company through rough patches. They have “skin in the game,” and their own money is at risk if the company does not succeed.

10. Hands-Off Management

Unlike later-stage forms of venture capital, angel investors typically do not ask for very much control over the company itself. They are unlikely to ask for seats on the board, for example. They do want up to a 50 percent equity share in the company, but they will remain relatively hands-off. This gives the company a better opportunity to grow on its own terms without having to answer to an investor.

11. Angel Investors are Long-Term Investors

Though early-stage investments are illiquid in nature, angel investors feel motivated to help companies that are just getting started. An angel investor may be looking for money right away, but they are likely to keep their money in the business for an extended period of time.

Working with an Angel Investor

Dan Lok believes that most early-stage companies would benefit from working with an angel investor. Angel investors have many advantages over traditional bank funding, first and foremost being the ability to give a large investment without an established business track record. Startups in certain fields like technology are more likely to receive angel funding, and they are able to receive valuable help from investors.

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Andy Jacob, Founder and CEO of The Jacob Group, brings over three decades of executive sales experience, having founded and led startups and high-growth companies. Recognized as an award-winning business innovator and sales visionary, Andy's distinctive business strategy approach has significantly influenced numerous enterprises. Throughout his career, he has played a pivotal role in the creation of thousands of jobs, positively impacting countless lives, and generating hundreds of millions in revenue. What sets Jacob apart is his unwavering commitment to delivering tangible results. Distinguished as the only business strategist globally who guarantees outcomes, his straightforward, no-nonsense approach has earned accolades from esteemed CEOs and Founders across America. Andy's expertise in the customer business cycle has positioned him as one of the foremost authorities in the field. Devoted to aiding companies in achieving remarkable business success, he has been featured as a guest expert on reputable media platforms such as CBS, ABC, NBC, Time Warner, and Bloomberg. Additionally, his companies have garnered attention from The Wall Street Journal. An Ernst and Young Entrepreneur of The Year Award Winner and Inc500 Award Winner, Andy's leadership in corporate strategy and transformative business practices has led to groundbreaking advancements in B2B and B2C sales, consumer finance, online customer acquisition, and consumer monetization. Demonstrating an astute ability to swiftly address complex business challenges, Andy Jacob is dedicated to providing business owners with prompt, effective solutions. He is the author of the online "Beautiful Start-Up Quiz" and actively engages as an investor, business owner, and entrepreneur. Beyond his business acumen, Andy's most cherished achievement lies in his role as a founding supporter and executive board member of The Friendship Circle-an organization dedicated to providing support, friendship, and inclusion for individuals with special needs. Alongside his wife, Kristin, Andy passionately supports various animal charities, underscoring his commitment to making a positive impact in both the business world and the community.