Getting funding for the start-up business can become a daunting
task, especially if you're not a seasoned entrepreneur. Luckily for you,
there are several ways to find needed initial capital. One of the
sources is Angel Investors. So, who are they? How to find them? And what
are positive and negative sides of working with them?
Angel Investors might be professionals such as lawyers, accountants, doctors, or experienced entrepreneurs who are wealthy and willing to invest their own money in your business. He/she generally "needs to have a net worth of at least $1 million and make $200,000 a year (or $300,000 a year jointly with a spouse)." [1]
You may think that since Angels invest their own capital, they are more difficult-to-please investors. As a matter of fact, they are usually more willing to take a risk and invest in an unproven idea than professional money managers.
Thanks to the electronic age, finding the right investor for your business now is easier than ever. The sources you can use are [2]:
FundingPost.com that was formed by angels and venture capitalists from various parts of the country. You just need to create your company's profile which will be showcased to the thousands of venture and angel investors ($107.69 billion) within the funding network.
ACE-Net (angel-investor-network.com) was developed by the Small Business Administration. It helps angels and small business owners seeking capital meet online.
AngelCapitalAssociation.org provides access to more than 13,000 angels and 240 angel groups.
Speaking of angel groups, they are very helpful in finding the right investors for your industry. So, how does it work? Angel groups will save your time by offering a meeting with a few angels in one place at one time. Those angels will spread the word among the rest of the partners so that they can decide as a group.
The main advantage of working with angels is that they are willing to take risks. For first-time entrepreneurs who have a great business idea, angels could be the right source to get investment from. Angel investors have another advantage over banks: they neither refuse to make a larger investment if they believe in the business's potential, nor angels expect you to repay the money if your business falls flat.
But, as you know, every coin has two sides. The downside of working with investors is that they tend to have high expectations. It's not unusual for angels to expect a return ten times their initial investment within the first five years of operating the business. On top of that, your investor will want to know the exit strategy or, simply, how and when he'll be able to reap the value of the investment in the company. It could be a public offering or selling your business to another company.
Finding the investor for an early stage company is a very responsible decision. So, be selective and try to find investors who add not just money to your company but also value.
References:
1. https://www.entrepreneur.com/article/52742
2. https://www.entrepreneur.com/article/238931
Angel Investors might be professionals such as lawyers, accountants, doctors, or experienced entrepreneurs who are wealthy and willing to invest their own money in your business. He/she generally "needs to have a net worth of at least $1 million and make $200,000 a year (or $300,000 a year jointly with a spouse)." [1]
You may think that since Angels invest their own capital, they are more difficult-to-please investors. As a matter of fact, they are usually more willing to take a risk and invest in an unproven idea than professional money managers.
Thanks to the electronic age, finding the right investor for your business now is easier than ever. The sources you can use are [2]:
FundingPost.com that was formed by angels and venture capitalists from various parts of the country. You just need to create your company's profile which will be showcased to the thousands of venture and angel investors ($107.69 billion) within the funding network.
ACE-Net (angel-investor-network.com) was developed by the Small Business Administration. It helps angels and small business owners seeking capital meet online.
AngelCapitalAssociation.org provides access to more than 13,000 angels and 240 angel groups.
Speaking of angel groups, they are very helpful in finding the right investors for your industry. So, how does it work? Angel groups will save your time by offering a meeting with a few angels in one place at one time. Those angels will spread the word among the rest of the partners so that they can decide as a group.
The main advantage of working with angels is that they are willing to take risks. For first-time entrepreneurs who have a great business idea, angels could be the right source to get investment from. Angel investors have another advantage over banks: they neither refuse to make a larger investment if they believe in the business's potential, nor angels expect you to repay the money if your business falls flat.
But, as you know, every coin has two sides. The downside of working with investors is that they tend to have high expectations. It's not unusual for angels to expect a return ten times their initial investment within the first five years of operating the business. On top of that, your investor will want to know the exit strategy or, simply, how and when he'll be able to reap the value of the investment in the company. It could be a public offering or selling your business to another company.
Finding the investor for an early stage company is a very responsible decision. So, be selective and try to find investors who add not just money to your company but also value.
References:
1. https://www.entrepreneur.com/article/52742
2. https://www.entrepreneur.com/article/238931
