If you are considering using an angel investor to help fund the initial expenses of your new business, you need to know what an angel investor expects to get out of the deal. After all, you cannot expect to use the investor's money for free, can you? There are certain aspects of the business deal that most investors expect to see happen, which lead to profit on their end.

Since angel investors are all individuals, they have differing views as to what to expect to receive out of the deal. However, most angel investors want to have a seat on the board of the new company. Also, many wish to have a role as a consultant for the company. This consulting capacity is actually quite valuable to the new entrepreneur, because they have access to the invaluable expertise of someone with years of experience in the business world.

No matter whom you have as your angel investor, you can expect to be asked to provide the angel with excellent communication about the progress of the business. Now, what excellent communication means is going to be different for each investor. Some will choose to have access to quarterly business reports, while others will want weekly or monthly reports, as well as profit projections.

All angels will want to own part of the business. This ownership is usually in the fifteen to thirty percent range. This ownership can be in the form of stocks, either common or preferred, as well as convertible debt.

Angels that are particularly impressed with a potential business investment often ask to be the first choice when more financing is needed. While they can refuse this financing, they want be the first option the owner turns to when seeking more money for expansion and growth projects. This can be problematic for some entrepreneurs, because they want to limit how much control any one investor has over their company. However, most business owners understand the reason behind this request, and are willing to comply. This needs to be carefully written into the proposal.

Finally, because they have invested money that they have spent their entire lives earning, angel investors may ask a potential business investment to ask their approval before taking certain actions, such as before seeking more financing, hiring management, or buying and selling stock. This request is designed to give the angel even more say in the business, protecting their investment and ensuring them a high rate of return.

If you are comfortable with these expectations and are in need of start up capital for your business, seeking the help of an angel investor is probably a good idea. Start networking and get your name out there in the investment world. You can have the money you need with the help of angel investors, if you play your cards right.

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