What is an Angel Investor?

What is an Angel Investor?

Angel investors can be crucial to start-up businesses. When options for getting the funds necessary to start your business are limited, finding an angel investor is a valid option to consider.

Angel investors are usually financially well-off individuals willing to help start-ups in high-growth industries of the moment. Most of the time Angel Investors will provide funding for your business in exchange for an equity share. Depending on how much they contribute, this share could be 10% or it could be more. This means that your angel investor is entitled to 10% of your company and any future profits.

While many Angel Investors are contributing money in the hopes of seeing a return on their investment, they’re also hoping to help young entrepreneurs and often want to give back to their communities. Investing in young businesses is a way to do that. These Angel Investors also often provide more than just funds: they become mentors who can share business advice and provide valuable contacts for new business owners.

An Angel Network, or Investor Network, is a group of angel investors who pool their money in order to make larger investments. Whether you’re pitching your idea to one angel investor or a group, know that they’re going to be choosy about the businesses they fund. This is a risk for them, so it’s important to have a sold business plan in place before you start seeking angel funding. They’ll most likely perform ma competitive analysis and take their time deciding whether your company is worth the risk to them.

If you’re considering Angel Investing as a way to fund your start up, you can learn more about the types of businesses Venture Advocates invests in here.

Other sites that may be helpful to you are:

Angel Investment Network

Angel Capital Association

Eric Payne: Business Valuation Basics

Eric Payne: Business Valuation Basics