Angel Investors are wealthy individuals or group of individuals who are looking to invest money in startup or early stages of a company.
You don’t need to be accredited to be an Investor however most money from investors comes from accredited investors. To be accredited as an investor they need to make at least $200,000 in income and have at least $1 million in assets.
Investors don’t need to be part of a group some are investors looking to invest in something they can contribute to and watch grow and be a part of while other investors don’t care for any involvement.
Angel Investors have one thing in common, they want to make a high return for their money, perhaps 20 to 40%.
How does Angel Investor funding work?
Angel investors prefer to invest in amounts ranging from $20,000 to $50,000 for small businesses who they think will succeed.
Angel Investors usually ask for a high return rate due to the very high rate of failure and you could be looking at giving away 10 to 30 times the amount they invested.
Attracting an investor is going to be hard. You need to make sure you have an airtight business plan. They will conduct due diligence and perform competitive analysis which eventually leads to 90% of companies being dismissed.
So where do you find the Angel Investors?
Its always recommended to find local angels to invest in your company but if you need to look further afield there are a number of companies online where you can pitch your idea and get feedback from investors. Try Angelsoft.
What is the difference between Angel Investors and Venture Capitalists?
As mentions angels prefer to invest smaller amounts whilst Venture Capital companies prefer to make large investments – in the millions of dollars.