Angel Investor Financing can be a great source of initial funding. They are individuals who have a high net worth and are capable of investing in high risk businesses such as financially challenged or start-up companies.
Angel Investors make their own decisions when deciding which companies that they wish to invest in. They don’t rely on groups, which are funds or Venture Capitalists.
They make their investments often by their belief in the Entrepreneur to succeed in making the business work. They do expect to see business plans and projections, in most cases, executive summaries are sufficient for them to make decisions.
The Angel Investor often makes a decision quickly. Angel Investors can change their minds quickly, so you need to be working to source new Angel Investors until you have secured all the funds you need for your business.
They are likely to be hands off, opting to give you the money for business needs and then relying on your updates to give them an idea of where your business is at.
Angel investors are friendlier to entrepreneurs that have had several starts. Failures tend not to bother Angel investors as much as you might think. They see it as the entrepreneur having been humbled and learned lessons that they don’t know everything that they think they might. Of course, it helps to have had several successes under your belt.
Angels tend to want to get into a business very early in the funding so that they get the best purchase price and as much ownership of the business as possible. They may take pride and actually brag about their investment in your company to others which may help you to raise additional funds.
Be careful though and do not share investor information unless the investor explicitly gives you permission to use their name. You may find this working against you and having potential investors avoid the attention.
Angel Investors often expect Entrepreneurs to have skin in the game. You can do this by investing your own money first, which helps you maintain greater control of your company, or taking out a business loan to seed your business.
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