For startup founders based in Seattle who are looking to launch a business, or expand an existing business, one popular method of financing that business is through angel investment. The main reason for this is that often new business owners are unable to get money from banks or from venture funds since these kinds of organizations need a lot of existing trading history to base their investments on.
Whereas, investors who use angel networks, tend to be less concerned about trading history and instead focus on the business’s potential, longer term. That is not to say they will not go through the due diligence process to ascertain whether a business will offer a good return- they will, but they will also take more of a risk since the potential upsides can be big.
Angel investors are wealthy, private individuals, who provide capital for young companies at the start-up phase or during a level of expansion. Business angels usually invest their own funds, so they differ from traditional money lenders, such as banks, accredited investors, and venture capital companies.
Sometimes angel investors work together in something called angel groups, which means that they can pool their money together into a sort of investment fund to make larger, or more frequent early-stage investments. Often these groups work in a particular location, so businesses based in Seattle may attract this kind of investment.
This kind of active angel investor can help fledgling businesses grow to the next level since they often have an extensive list of contacts and are experienced so can offer a lot of advice to the new businessperson. Finding an angel investor that has experience of doing business in Seattle and has local contacts can be beneficial.
Not all angel investors are interested in mentorship since some are too busy and instead, they just get involved in the fundraising aspect of angel investing. So, owners of early-stage startups in Seattle, should make a judgement call to decide what kind of angel investor they require.
Business angels will work with Seattle entrepreneurs and companies across various industries - from tech companies to real estate and life sciences. They do not usually have a prior history with the company that they are investing in, but they may have a good understanding of the particular market that a business operates across.
Often a start-up business either tackles or supports some of the popular types of businesses that tend to congregate in a particular city like Seattle, which is one of the reasons why certain angel investors may want to pick a certain city to invest in.
Tech companies may also prove to be a popular area for angel investment in Seattle. A host of companies have moved from Silicon Valley and the Bay Area to instead base themselves in Seattle, which has become more popular in recent years.
If your new business targets one of the more popular sectors, it may be in a better place to receive interest and investment. However, this is not always the case or indeed necessary. A good idea that has the potential to be successful will always attract investment.
You might also find that certain angels look to invest in often neglected areas, such as non-profits, minorities or will look to invest in a company with female-founders.
For individuals who are looking for additional support in the Seattle area then organization such as the Washington Technology Industry Association (WTIA) may also help your new business if appropriate.
Because the Angel Investment Network covers over 30 countries it is possible to connect with business angels that are looking to invest in businesses in Seattle, and the rest of the United States.
AIN helps investors and entrepreneurs build lasting and profitable relationships to build better businesses and brighter futures.