PrintAngel investors are individuals who are interested in investing in early-stage or startup companies in exchange for an equity ownership interest. Such investors are likely to invest only upon seeing a business plan that indicates clear potential for profit and growth.
These investors are often willing to invest in ventures that are too risky for banks or that aren't potentially profitable enough for venture capitalists. Nevertheless, angel investors are primarily motivated by a return on their investments. Additionally, angel investors may be willing to invest smaller amounts of money than venture capitalists or other financing resources. For more on what angel investors are looking for, check out What Makes an Angel Invest?
Angel investors can be a good source of advice, guidance, networking opportunities, and other financing resources, in addition to their own angel financing. Angel investors tend to invest in businesses they believe in, are interested in, or in which they have experience.
Angel investors are also typically more interested in a business's founders and management team than other investors. And although like other investors angel investors will want to cash out of their investment after a set period of time, that timeframe tends to be longer, typically five to seven years, compared to two to four years for venture capitalists.
Finding Angel Investors
Angel investors can be found by asking your colleagues, accountant, lawyer, and friends and family. In some communities, there are specific angel networks, which networks can be found by contacting your local chamber of commerce or simply looking in the telephone book. Another way to find an angel investor is to perform a Web search on Google or your search engine of choice. And be sure to read How Do I Contact Angel Investors?
