What is an Angel Investor? Understand Angel Investors

What is an Angel Investor?

Believe it or not, there are people out there that are looking for businesses like yours to invest in. They are known as “Angel Investors,” and they have private funds set aside for the purpose of investing in startups or very young companies, often with the hopes of finding the next “big thing”.
Many people often follow the Investor Business Plan to attracts Angels Investors These Angels Investors will usually want part of any equity made from your business, but if this sounds like the boost your company needs, sharing equity may not be a large stumbling block.

Angel investors are individuals who seek to invest at the early stages of startups. Angel investors are people who try to contribute at the beginning phases of new companies. Most Angel investor have abundance reserves accessible and are searching for a higher pace of return than those given by customary speculation openings.

Angel investors give more positive terms contrasted with different money lenders, since they generally put resources into the business visionary beginning the business as opposed to the reasonability of the business. Angel investors are centered around assisting new companies with making their first strides, instead of the conceivable benefit they may get from the business.

Angel investors are also called informal investors, angel funders, private investors, seed investors or business angels. These are individuals, normally affluent, who inject capital for startups in exchange for ownership equity or convertible debt. Some angel investors invest through crowdfunding platforms online or build angel investor networks to pool capital together.

What is an Angel Investor

How to Find Angel Investors?

Many Angel Investors have formed networks to help them find new and promising companies, but they also have the ability to pool their funds so that they will have more to invest. Fundraisers, social events, parties, and even sporting events are common places to find and make connections. The internet has also become a prime resource for Angel Investors and those looking to connect with them, with websites like AngelList providing virtual introductions.

What do Angel Investors Look For in a Startup?

The Small Business Administration lists five things that most angel investors look for in a new company’s business plan: A believable market definition, a credible growth plan, defensibility, scalability, and a feasible exit plan.
Angel investors often have more to offer than investment capital. Because of their business experience, they may ask for active involvement in your business, such as consulting and mentoring the entrepreneur. They often take bigger risks or accept lower rewards when they are attracted to the non-financial characteristics of an entrepreneur’s proposal.
LEARN MORE about your investment and funding options with our Wise Learning Series e-learning resources.

here can I find angel investors?

If you’re not sure where to start looking for angel investors, try the following strategies:

  • Personal/professional network. You’ll likely need to be introduced or referred to angel investors, so get to know the right people to make those introductions for you.
  • Local chambers of commerce, Small Business Development Centers, and other local business organizations. According to Bplans, angel investors tend to invest in businesses that are close to home.
  • Angel investor websites. Many websites exist to match entrepreneurs and angel investors, such as Angel Capital Association (ACA)Gust (formerly Angelsoft), and Carrefour Capital Connexion.
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<div>Joseph Ferriolo <i class="fab fa-linkedin" style="color: blue"></i></div>
Joseph Ferriolo
Director at Wise Business Plans®
Joseph Ferriolo is the Director of Wise Business Plans. He has overseen over 15,000 written business plans during his tenure, raising over $1BN in funding and providing 30K+ consulting hours for startup companies.

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