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Traditonally, one of the biggest windfalls for fledgling companies has been the support of angel investors. These individuals or groups provide much needed capital to small businesses in exchange for convertible debt or equity in the company. In the past the only way to land angel investor deals was to make loads of business contacts, do lots of networking and make lots of pitches to individual or investment groups in the hopes that one might be interested. Today, more and more angel investors are getting involved with online platforms to meet up with potential businesses. Here are three reasons you should consider taking this less-conventional approach to finding an angel investor:

1. Save Time
It can take hours and hours of time and work to personally find, meet, and woo investors. An online platform like Kickstarter, Gust or AngelList, can provide tens of thousands of investors all in one online forum. They will all have the opportunity to view your information and your business needs. Using an online platform can take the pavement-pounding out of fundraising.

2. Save Money
Almost all online angel platforms require a placement fee, a cut for connecting you with your investors. Sometimes this fee can be hard to swallow, if you think you could save money by finding the investor yourself. However, an online platform can often save entrepreneurs a lot in the end. In order to initially connect with investors, business owners will often turn to advisors who require incentive compensation in exchange for their services. This could end up costing your business more than the fee charged by an online platform. Plus, individual angel investors many negotiate for more equity or warrants than you would like to give up, also costing you more in the long run.

3. Dictate Terms
Online platforms give entrepreneurs the freedom to set the terms of their angel investors deals, unlike when negotiating with an individual or group personally. With an angel platform you could limit the amount of participating preferred stock investors can have. You could take out any possibility for redemption rights or cumulative dividends.

So if you are looking to save time, money and headaches, online angel platforms can offer a helpful alternative to traditional small business fundraising.


Search for Small Business Loan Sources and receive your matched lender list
AND received FOUR free Business eBooks worth $39.95!
Search for Small Business Loan Sources