Starting a business can often be a difficult proposition, particularly if you don’t have the start-up capital needed to fund it. There’s nothing worse than wasted potential.
There are many different types of financing options for new business owners, and finding an angel investor is one strategy that may very well pay off over the life of your business.
Angel investors are generally wealthy individuals, entities, companies or investment firms who invest their own funds in start-up companies. They tend to be able to provide more money to new business owners than traditional avenues — and probably way more than your parents.
Angels can float as individuals or band together in networks. In general, they’re looking for high-risk, high-reward propositions. The specifics are incredibly subjective. Some angels look to inject capital and their personal expertise into a business, which is a great thing for entrepreneurs. Start-ups should always seek smart money.
Harnessing an angel investor can prove a great idea on multiple fronts. Needless to say, the large amount of money that an angel investor can provide upfront can allow a company to start operations and scale quickly, or possibly hire appropriate and well-trained staff (although immediately adding non-critical payroll isn’t often a stellar business decision).
Another, less tangible benefit to using angel investments as a way to begin your business is the experience and expertise of your investor. Angel investors can provide contacts and mentoring and are typically as invested in the success of your business as you are, all of which can have significant and positive benefits.
Angel investing is available in nearly every single sector and trade. There are no set rules or requirements regarding who can receive funds from an investor, making it an ideal situation for a wide variety of businesses. Additionally, many angel investors prefer to invest their money locally, which fosters economic growth in their community.
You can find angel investment networks and individual angels through traditional sources, namely by tooling around a search engine. But you can also check with your local Chamber of Commerce, a nearby business incubator or even the local university’s business school.
Inc. magazine also has an excellent resource page on angel investors and how to find them.
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