angel-investors, investorsYou often hear the term “Angel Investors” in the context of starting a business, but the actual investors tend to be few and far between. How do you find them without paying a firm to connect you? And once you do, how do you know when they’re asking for way too much up front?
First rule of investing --
Friends and family.
I grew up with no connections. My parents were broke. I had no access to any sort of funds. Everybody was in debt. Etc. etc. etc.
Friends and family are good, why?
Because they're trustworthy people who might even be in it just to see you succeed.
They're open to reason, and often have better long term vision for your team than say, a venture capitalist.
Along the same lines as the above, since they know you, they are often understanding of company policies. If they do trust you (they wouldn't be investing if they didn't), they'll let you make your own company decisions.
As for how you find them...
Ask your own friends. Ask your own family. You'll probably have a low success rate if you're anything like me. But one friend with connections is sometimes all it takes.
Keep trying, and repeat #1 until all else utterly fails.
If you couldn't find either, you probably won't be able to get funding until further product development, or you become more experienced with your persuasive abilities. In order to somehow pull through, you may have to start asking people to ask people. Because if you haven't made friends with that local, renowned angel, chances are you aren't going to be able to just "find an investor."
I hope that helps!
EDIT: Totally missed the last part of your question. This is a really touchy issue. I really recommend pushing for a loan, or convertible debt before ever doing a direct-equity investment. Unless you have some ungodly evaluation (which is unlikely, if you're at this seed stage or earlier), your company valuation is "mathematically" near zero, since you have little or no metrics/traction that proves future sales or value.
So the goal then is to not lose equity, but also to not lose their trust. Always treat your investors great and make them happy. They are your friends.
P.S. Here's a nice, depressing article from Forbes about how rough managing funding is.
You can look into this answer about how to start contact with investors, it should be appropriate for your matter too.
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