What are Angel Investors?
Angel investors are a good source of funding for your business. What are they? They are generally individuals who are independently wealthy. In order to maintain their wealth, they invest some of it in businesses that are just starting. In return for their investment, these individuals become part owner or shareholder in the company they have invested in. They have some say in how the company is run, and earn off return on their investment off the equity of the company. The percentage of ownership of an angel investor is usually between fifteen and thirty percent, depending on the amount of risk associated with the business.
Most angel investors are retired businessmen or women who did quite well in their own business pursuits. Having their expertise on board with a new business plan is a good idea for most new business owners. These business angels provide much more than just money. They provide leadership and guidance for young, starry-eyed business owners. This level of expertise often proves to be priceless for the young entrepreneur.
Angel investors can also use stock in the new company as a way to fund growth. They are given stock in the company as part of the investment agreement. Then, when they receive dividends on that stock, instead of pocketing those dividends the investors forward them on to the new company or business, allowing the funds to be used to grow the company. This is allows them to become board members of the new company, sharing in its equity over the long run.
You can use the internet to find angel investors. Do not feel that you have to be limited to a geographical area when seeking the help of a business angle. If your investor feels that your business is a good investment, he or she will not mind traveling from time to time to help with the oversight of the business. Having the help of an angel investor can mean the difference between a successful business start up, and failure. So if you have the next big idea, consider enlisting the help of an angel investor to fund your initial expenses, and give you the advice and direction you need to succeed!
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