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What our members have to say...
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"In the new economy Angel Investment Network makes "room at the inn" for start-ups/innovators unavailable in Wall St. & The City. AIN prepped us for an effective, short, sharp investment summary that led to global enquiries from Jo’burg, Vancouver, Mumbai, Middle East and Europe in ten days! First close – one month."
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David Bonner - www.thor-power.com |
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Find the Suitable Angel Investor for your Company
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When deciding to start-up a company, you also have to think closely about your capital needs. Based on the company’s profile, the initial capital demands can widely differ. It generally happens that, for small local businesses, the funds you need initially can be provided by yourself or by your family. But, if your start-up business demands a larger amount of capital, you should take into consideration applying for a fund from an angel investor. Unlike venture capitalists that generally prefer funding expanding companies, angel investors are a lot more open to start-up business ideas.
Angel investors are wealthy business persons who invest in business ideas that are viable and have a wide growing rate in a rather small period of time. At the global level, angel investors annually invest an estimated amount of $25 billion in start-ups. Although in the past they used to work as individuals, there is a new tendency among angel investors, that of bringing their forces together and forming groups that provide capital and expertise, that generate deal flow and create a formal screening process in order to pitch entrepreneurs that present a profitable business idea. The new trend of grouping angel investors into funding organizations will make the process of finding the suitable angel investor easier.
There are several methods you should use when searching for angel investors. You can try networking, searching for websites with angel investors contacts, which is a rather time consuming method. You can also try asking people around you if you live in country that already has a widely developed funding history. It may happen for persons that are rather close to you already have a past in angel investment you did not know about. Try speaking openly about your need for an angel investor and you may drop on the suitable person when least expected.
There are some other elements you should take into consideration before applying to an angel investor. First of all, you should make sure that you need an angel and not a venture capitalist. The main difference between them is that angels generally fund start-ups, while venture capital firms prefer expanding companies. Angels generally invest amount between $5,000 and $100,000 while venture capitalists provide amounts of $2 million or more. Although they do not interfere in your running of the company as much as venture capitalists do, expect the angel investor to want to provide you advice on how to run the business and relevant contacts for expanding your market. It is normal for them to show interest in your business as they will obtain a rate of ownership in your company in exchange for the capital they provide. They are interested in obtaining a high return rate in the 3 to 7 years to come.
If all these conditions are satisfied and if you already have a well-written business plan, that also states a viable exit strategy; you can start your quest for an angel investor. Finding the suitable angel investor is an easy job if you have the suitable software providing you all the information you need.
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