Without a doubt, the most common question among new and inexperienced entrepreneurs is, “How do I obtain funding for my business venture?” It’s an eternal problem: entrepreneurs complain that investors are unwilling to take a chance, while the venture capitalists complain there are no ideas worthy of investing in, and both sides have a point. There are way too many ill-conceived, inadequately researched business plans that are slapped together and which are a waste of investors’ time, but it’s also true that over the last decade venture capitalists have shifted their funding to less risky, later-stage ventures with shorter time horizons.
This preference for funding later-stage ventures isn’t going to go away any time soon, and so it’s important for entrepreneurs who are seeking early-stage equity financing to consider approaching angel investors instead. Sometimes referred to as the “invisible venture capital market,” angels are high-net-worth individuals or small private equity …