Should Your Small Business Seek Angel Investment in 2021?


When the pandemic struck, it left us all with a bitter taste in our mouths – especially as business owners. Uncertainty was constant, sales and customer interests were highly volatile, and for many companies, it was no longer a matter of planning for the rest of the year and more about surviving the next few months.

My company, Circle 5 Books, which focuses on web copying and marketing, has not taken much active stance toward the pandemic. We worked and are still remote, and thank God, always writing in style.

However, I cannot imagine the pressures other small businesses are subjected to. Those that were affected immediately and frequently, such as hospitality and retail, are now facing lockdown.

Does this mean that we, as the small business owner, are done? Or, are there really more opportunities for growth if we take the time to research?

Crisis Funding

During a protracted crisis, it can be easy for potential and existing business owners to let go of any ideas to look for financing. Banks are tightening credit qualifications, friends and family have their own concerns, and crisis funds, like the public-private partnership, are limited in scope.

But what about angel investment? Are these investors, who have a personal stake in small business financing, still doing so during the downturn? Well, it really depends on what your business is and what industry you are serving.

If you are opening a pet grooming business, look no further than an angel investment. Find a safe bank loan. But if you are looking for an industry that solves a problem related to COVID, it will most likely attract angels to your offer.

So, saying that the market is in decline is just a great excuse not to try. It is not very poetic. If you thought you couldn’t open the doors of your small business because there was no funding, then you are wrong.

Right now, Angels is looking for smart investments, mostly as urgent solutions to the world’s current needs.

In fact, there are now three critical areas for business capable of bearing the elevator first idea: healthcare, technology, and education. These are the small business sectors that are in greatest demand.

If you have an idea of ​​something that solves the current crisis, you are looking at much larger initial rounds and a more dilute investment. Seed rounds have grown exponentially, and angels have actually invested twice that amount in seed rounds since the outbreak of the pandemic. The standard Seed Tour was about $ 75,000 to $ 150,000 to startup. It is now up to $ 300,000.

This is because angels make their money by investing in startups. When there is a deficiency like this, their stomachs rumble! They need small companies to make money, and they may have lost hundreds of thousands of companies due to recent closings. They need to find viable opportunities to invest in.

The small group of companies to invest in is smaller

The most difficult investment decision for an angel investor to make is finding the company. With more than half of small businesses closing their doors this year or last year, there is now much less competition for startups to capture investor attention. We are seeing higher investment amounts for longer periods of time.

Once again, investors are looking for smart solutions that address these problems, and which have the potential to survive even after the pandemic is over. This is because they know that by putting $ 300,000 into initial funding for a small business that specializes in problem solving, they can expect a greater rate of return over a long period of time.

The stakes are more acceptable

There is a good chance that investors are more exposed to risk at the moment. This is again because fewer and fewer people are seeking funding from it. This leaves them with fewer investment opportunities unless it provides them.

This does not mean that their standards or expectations have changed. Owners will now be looking for a startup seeking to solve the problem at hand with a great outlook for future applications later in time. If you want to succeed in the moment, take the game with an idea that will either help or renew the current crisis while also striving to achieve growth in later stages over time.

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Is now the best time to start a business?

Many of the well-known companies today were established during the economic downturn. For example, General Motors was founded in 1907 during the Great Depression. This may be due to the need for inexpensive transportation options at a time when most people’s wallets were extremely tight.

When a recession occurs, it means there has to be an “umph” of entrepreneurship that allows us to solve the problem. Just like any great business plan, you must have a problem and have a viable, valuable and cost-effective solution. In this case, General Motors provided faster information processing and transportation of vital resources across the country.

The Great Depression was an opportunity, not a death sentence. This is how we should be thinking now because this is how angel investors think.

Now, this is the part to watch out for – the cost of starting a small business right now can be virtually bankrupt. Since everything is virtualized, overhead costs on furniture, office space and equipment are absolutely low. This means that what would cost us $ 300,000 in investment two years ago is now nil. Why not start now?

Start up

So, if you have an idea for a project, now is the time to start the game. Even if it’s not tech, healthcare, or education, keep in mind the changing landscape of angel investors.

In fact, see it from their point of view. They lost nearly half of their investment that went to small businesses now shutting their doors. So it is evident that the amount they can invest in is ten times higher when there is work ten times less. Instead, look for an investment that has a state of mind about longevity.

Imagine tomorrow’s future problems, and how this epidemic can be a golden opportunity for success. Start your business now, learn about your industry, and research history. Then go and write this business plan and find an angel investment group. Gust.com is the capital of angel investors. You need to go ahead and start promoting now before this opportunity starts to seize us.

Well, what are you waiting for? Get it and start your business now!

Ryan McClellan's Avatar

Ryan W. McClellan was only seventeen years old when he began his first novel, and had been writing his entire life. He now contributes to several magazine publications, has six books on store shelves, as well as several free e-books, and has won awards for his short stories. He currently works as a freelance marketing ads writer and attends Florida International University as a Marketing Major and Business Oriented through the Chapman School of Business.



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