Angel investors generally keep a bull's eye on limited start-ups.
Angel investors, or private individuals that propoundment essay finance to entrepreneurs launching distinct endeavors, can serve as a high-priced financial and informational resource in the affair start-up transaction. Entrepreneurs may face hard-bitten competition for angel investments, though, and some angels gain great expectations for the organizations they take.
Description
Angel investors, according to Inconsiderable Complication Paper money, are typically wealthy individuals who proposal funds to newly formed businesses as an investment vehicle. These investors seek a higher go back on their investment than traditional stocks or securities can pass, and many are, themselves, entrepreneurs who yen to change into involved in a fledgling disposal. Mini Function Paper money says the word "Angel" dates back to the early 1900s and referred to wealthy businessmen who helped carry Expert theatre productions off the ground. To clinch the advance of the advanced function, and uplift the likelihood of the investor earning a reinstate, many angels pass entrepreneurial support, accommodate more private loans and yet overture to assure inexperienced Obligation for the group.
Finding an Angel
Angel investors may seem somewhat elusive in the start-up argument marketplace, as many prefer to carry on nameless and conclude not information themselves on common financial assistance references. The small business capital organization Grow Think offers some ideas for finding angels, as it notes that online forms and other applications do not typically help new businesses find this type of investor. According to Grow Think, entrepreneurs who network with other successful business owners or who gain referrals from others stand the greatest chance of securing angel investment funds, but some start-up owners focus their prospecting efforts on uncovering an angel in the community of retired executives and existing business owners. Businessweek also explains that securing angel investments often requires a significant amount of time meeting with the angel to gain trust, explain the business and build a relationship. Angel investors may become privy to intellectual property, and some may offer investments as low as around $25,000 as of January 2011. Small Business Notes also observes that as much as 90 percent of angel investing focuses on small organizations with fewer than 20 employees.
Though Businessweek explains that the process of securing funds from an angel investor is somewhat rigorous, angel investors are not financial institutions and often do not require the entrepreneur to personally guarantee a return on the investment. Small Business Notes also explains that angel investors build long-term relationships with the organizations in which they invest, and many can become trusted advisors and confidants for the entrepreneurs they support.
Consideration
Despite a number of benefits associated with angel investors, entrepreneurs should keep a few considerations in mind when accepting angel investment dollars. Small Business Notes explains that angel investors can become heavily involved with the organization, and some may seem more like a partner than an investor. A 2008 article in Businessweek also suggests that entrepreneurs can connect with potential investors on the Angel Capital Association's official website or through the Angelsoft organization.
