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I have established a high technology startup company in South Africa. Our first project is assembling, marketing and selling branded desktop PCs and notebooks. Our business require start-up amount of $ 3 million to design , develop and pilot out product. Is there an angel investor out there willing to invest in our project?
Congratulations of what sounds like an exciting venture. Keep in mind that the hardware industry is a highly competitive marketplace with some very deep pocketed players. In order to be successful in this market, you have to overcome two substantial obstacles. First and foremost, you have to overcome the brand image of companies like Dell, HP, Compaq, IBM and Sony. Their brand alone signifies tremendous quality and great loyalty by consumers. These are household name companies. Regardless of whether or not your systems can outperform and are less money, these larger companies have the infrastructure to support sales, low cost buying, overseas partners with cost-effective parts and add-ons, intense, multi-million dollar ad campaigns as well as service departments and customer service groups located across the globe. This is daunting set of competitors to go up against and you’re playing in a very crowded, thin-margined, marketplace. Second, you have to show why your product(s) are superior in quality, performance, durability, or perhaps some technological edge. You have to ask yourself, why would someone buy by brand X computer over an established company’s brand like Dell? What can I offer to a customer in addition to a computer that may be better? i.e. service, customer support, etc. To answer your question in short, yes. There are angel investors and venture capitalists that may consider your opportunity a valued one, but your business plan has to convey exactly how you differentiate yourselves from the giants mentioned above, how you will be able to produce computers at a cost effective rate, show solid profit margins on sales, define a clear marketing plan that will hold up, and a growth plan to effectively increase sales year after year despite intense competition. You’ll also have to show how you plan to support service issues, customer service, distribution, etc. Finally, you have to show that the management of this company has the experience and skill sets to execute your plan effectively. Not impossible, but enormous hills to climb. I understand that your question was to learn about an angel investor willing to help develop a prototype and work through design issues. Keep in mind that no investor will put up money without a long-term plan in place. What you’re looking for is typically referred to as “seed” capital – capital used to build your first product, get some feedback, iron out the kinks and come up with the final product. Once that is established and completed, you would then seek an ‘A’ round of financing to get the business rolling. My advice, work on your business plan and “make it bulletproof” – meaning, make sure that when you present your plan to professional investors, it will survive the intense scrutiny that it will receive. I would be happy to answer another question or expand on what I’ve already discussed.
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