EconGuru Economics Guide RSS Syndication

Get published on EconGuru.com. Start here!

© Copyright 2006 - 2011 EconGuru.com. All rights reserved. Assets marked and linked to the original sources are hereby used for educational purposes only and are copyrighted by their respective owners.

Subscribe to EconGuru.

What is an Angel Investor and How to Find an Angel Investor?

Subscribe to EconGuru:

If you are just starting off in business, or even hoping to grow then you might be struggling to get investment for this. If your venture has not had a chance to grow and prosper it can be hard to convince the big lenders to part with their cash. Even if you have the right attitude and a killer business plan you could still be struggling to get a fair hearing. The recent economic woes that have affected most of the world mean that you have to practically beg now if you want to get investment from traditional lenders. The alternative to this grovelling for investment is the angel investor; these are people who are willing to take a chance on your business even when traditional lenders might be cautious.

What is an Angel Investor?

An angel investor can be practically anyone. It could be a successful entrepreneur in your local community or it might even be a member of your family. Angel investors come in all shapes and sizes but the one thing they have in common is that they are willing to put money into your business. Here are just some of the possible motivations that can encourage angel investors giving you the cash you need –

  1. Some retired people miss work and they might see investing money in your business as a way to feel useful again. These people can be very knowledgeable when it comes to business and you can not only benefit from their money but also from their mentorship. Of course you will want to draw the line somewhere as some may try to interfere a bit too much in the day-to-day running of your company; this should be all clear before taking any investment.
  2. Some angel investors might see something in you that reminds them of themselves when they were starting out. The reason for investing is that they feel they are giving something back.
  3. Investing in companies starting out can be risky but there is also the potential for huge rewards later on. The most common reason why angel investors will put money in your company is that they see it as a good gamble.
  4. Family and friends may want to help out with your business out of a sense of duty or love, or because they see your business as having great potential.

How to Find an Angel Investor

Once you understand the motivation for the angel investor it makes it a lot easier to find them. Tell family and friends about your business plans and see if they are willing to invest; always be honest though and never persuade them to invest in something unless they are fully aware of the risks. You can also put the word out in your local community and you might be surprised who will come forward to offer you an investment. There are also different online and offline services designed to allow business owners and angel investors to meet.

Share This Article:
Meet the Author

Anthony Carter currently resides in Fife, Scotland with his wife Lisa, and their three wonderful children. As a senior editor for various publications, if he's not reading and writing, you would find him photographing and traveling to some of the most far-flung locations around the world.

Tags

Tags: , , , ,

EconGuru Economics Guide

Educating the public since 2006.