I have been working on a business plan for a few months now for a brewery. The concept is a “sports” brewery where people are able to watch sports broadcasts while also partaking in various sports games and activities offered at the brewery. The vision is to incorporate the active lifestyles of our target customers into the experience and also look to be a part of that lifestyle outside the brewery. One of the questions I asked myself when I started, and continue to ask myself as I progress in the business plan, is how feasible is this business?
I have separated the feasibility of the business idea/plan into market feasibility (the demand for the products/services, the competitors, the unique selling proposition, etc.) and commercial feasibility (the amount of startup capital needed, fixed and variable costs, break-even points, etc.). As I have explored all of these topics I have come to the realization that I may need more capital then I previously estimated in the beginning stages of my idea. So where do I find funding? I knew of the basic ways many people fund their companies which include putting their own money into the business, borrowing from friends and family, getting a business loan from the bank, or through crowdfunding such as Kickstarter or Indiegogo. However, there is another source of funding for startups in the form of angel investors. Angel investors are investors who are looking to fund startups.
From the book, Winning Angels, I have gained an understanding of what many angel investors are looking for when it comes to investing in startups. For instance, out of hundreds of business plans they may view in a year, they will only choose a handful to invest in. Many of the investments have derived from referrals from people they knew or from networking. In one example, John Hime’s (an angel investor) one page summary outlined specifically what he was looking for as an investment. This included a business with an internet focus related to e-commerce, in the concept stage with only two to four people involved, and a business plan with a lot of market research and big market opportunity.
I have been able to take away many of the key points made for becoming a successful angel investor and apply to myself as an entrepreneur. I have found that building relationships and networking have helped me more than anything else in the business world. One of the main reasons I was hired for my first job was because I knew someone who had a business relationship with the employer. As I have started developing a business plan, I have also found it helpful to reach out to professional advisors such as bankers, lawyers, and contractors to get a better sense of what I need to plan for. I think another key aspect is focusing on your network. For myself, I know what industry I want to be in. I see the benefits of developing those relationships now and continuing to reach out and network within that industry.
Gust is an interesting investing platform I stumbled upon while researching angel investor resources. The site matches entrepreneurs to investors while also narrowing search criteria for investors to find the startups that best fit their interests. Startups are able to build a profile and share it with potential investors. I think this sort of networking could be really helpful for entrepreneurs who may find it difficult to locate angel investors. This will definitely be a resource I will explore more and utilize in the upcoming future.
Amis, David, and Howard Stevenson. Winning Angels: The Seven Fundamentals of Early-Stage Investing. London: Pearson Education Limited, 2001. Print.