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If you're an emerging business with the next excellent product, sometimes you need to have an angel on your side.
A study by the University of New Hampshire's Center for Venture Investigation showed that "angel investors" - high-net-worth people willing to invest in entrepreneurial companies at an early stage - shelled out a lot more than $18 billion into early-stage businesses final year alone, compared to $304 million by venture capitalists.
Locating an angel investor, nonetheless, is not an effortless job. Safer Smokes Inc. is one business that understands the challenge of attracting the proper investors.
This improvement-stage firm is tapping the smoking cessation market place with a exclusive tobacco-totally free, nicotine-free smoke referred to as Bravo, which has the appearance of a classic cigarette and burns like tobacco, but is actually produced from lettuce fibers.
"Bravo lets you smoke your way out of the tobacco habit progressively," mentioned Puzant C. Torigian, chief executive officer of Safer Smokes.
For companies like Safer Smokes, it may be too soon to approach big venture capital firms, however time to move beyond networking with family and buddies. Angel investors to the rescue.
"The challenge for raising capital in today's market is in harnessing the courage and vision of the angel to see via to the true investment chance," mentioned Torigian.
So how do companies like Safer Smokes attract their angel?
* Have a clear-cut target industry for your item or service. For example, Safer Smokes is targeting the smoking cessation industry, which has sales approaching $ten billion per year, up from $6 billion just 3 years ago.
Most angel investors favor firms that are likely to show positive cash flow within their very first 18 months, so having these sorts of statistics about your marketplace can be an incentive.
* Match the company plan objectives to the angel's danger tolerance. Investors want to know the item or service will be distinctive and nicely-cultivated. Safer Smokes has a patented answer that business officials say will "have an effect on the landscape of the health care business." [http://www.ideaangels.com/ company formation]