An angel investor is a person who invests in sound at business start-ups or early-stage small businesses.
Most angel investors are wealthy individual or a group of individuals who are having spare money with them. They are looking for new opportunities to invest.
They are looking for a higher rate of return than traditional. Unsurprisingly they look for a return of minimum 25 percent or more in any investment.
Angel investors are the solution for, fill in the gap between venture capitalists with the small-scale financing providers.
They provide the main capital for a start-up inauguration or expansion in the form of equity financing.
Who are an Angel Investors and What Qualities they must have?
Angel investor need not to an accredited investor. However, most of the money they invested in any start-up or company comes from accredited investors only.
(Note: In the US, who had had a net worth of at least $1,000,000 is treated as an accredited investor)
Because of, most of the angles are coming from angel investor groups. They never flew as a single. Who are having quite a knowledge about companies and investing methodology, they flew alone also.
However, all have one thing in common, that is investing in small businesses.
They invest wherever the possibility to get or earn a high return on their investment perhaps as high as 20% – 40%.
How can we find Angel investors?
India is having a good network of angel investors at present. There is a lot of sources have to get angles in online or nearby your areas too.
Related Article: Easy ways to earn from your services
If you want to find in online, “Angelsoft” an angel investor network, is giving a quick glance.
Try to find a person/ angle,
- Who has previous successful entrepreneurial experience and age turned out to be at least 40 years
- They had tried to hold the investment for maximum extent (up to five to seven years)
- Who enjoys in advising the entrepreneurs or early stage start-u’s and likes to be part of the action for his support
- They try to syndicate of the other angel investors to invest and try to multiples of individual investments
- Who likes to invest in an industry with which the angel is trying to familiar
- They deal through referrals
As per statistics, they recommended you to find an angle funding in near to home. Means Banks, local attorneys or commerce chambers and communities are having some angles or they may know.
Or you need to be referred by right person to an angel investor.
Right referral means immersing yourself in your local business and social community to find the right angle for your business.
Attend trade fairs and events conducted by business communities. Create your personal branding with your interpersonal skills and meet as many people as possible.
What is the role of an angel investor in your start-up or a business?
Apart from the investment, some angel investors like to be involved or to be a part of the company.
For example, they may want a seat on or member of the Board of Directors.
If you get a smart angel, they are guiding, triggering and trying to evoking you like them.
They are in touch with at every point of your success.
As a small business owner, we could use the expertise on your every hurdle and the access to another potential round of funding too.
What are Angel Investors looking in your Business or Start-up?
Most angel investors are successful entrepreneurs. They help to build and create a thriving enterprise and they take a high degree of risk too.
They are having more patience levels and willing to make long-term investments.
Their expectation of doing is more than just getting their money back. So they estimate your capability potential at every part.
Maximum cases, as per statistics, every angel investor is looking for in any business is
- A Proper solid business plan, to be executed
- They will expect to see an exit strategy, by this they’re going to reap the return on their investment
- A solid experienced management team, by their managing skills
- Try to get an opportunity to be involved in team activities
- Expectation reachable capabilities or is it best for a good returns
- What business investment structure they have followed for investing methodology
Angel investors are typically looking for the hot, high growth industries of the moment.
And what changes they made based on the economy and economic needs change.
Related Article: Simple ways to build a long-lasting relationship with your clients
They also want to see all things such as marketing plans, financial projections, and specifics about your market.
What are the pros and cons of Angel Investor in your business?
One thing you absorbed if you read this article thoroughly from first to last. i.e., angel investors are trying to get a higher rate of returns.
Because of that, they try to involve in your business. You are having a well-experienced angle in your hand knowingly or unknowingly. So they
- Teach you about your failures like a friend
- Guide you at every point of time like a father or mentor
- Less risky investor than debt financing
- They give you a long-term support in finance
All the above are advantages if an angel is there in your business.
The only disadvantage is you may lose the complete control of your business.
Debt financing, they haven’t control over the operations of your company.
But in Angel investor they have control power; they run the show on behalf of you sometimes.
At last, they receive a portion of the profits when the business is sold.
It is the most important, for any business person thinking twice about accepting an angel investor in your business.
And that investment is to be very clear about what the investor is bringing to the deal besides money.
Try to understand what the angel investor would be like to work with.
As a small business person, it is the important thing to have a comprehensive business plan in right place. And need a plan to secure financing from lenders or investors.
Related Article: Simple Ways to build your personal branding in your services
Try to motivate yourself to restructure your business plan at any point of, if necessary.
Finding an angel investor is not an easy task in this scenario. But the efforts will pay off your back when you find the angel investor who is willing to invest in your business.