Have you ever wondered where angel investors come from or what type of people you are going to present a business plan to? Is it a Donald Trump type of person – flamboyant and quite wealthy? Or is the investor someone more like your neighbor down the street who has quietly amassed a small fortune yet lives frugally? The truth is that the angel investor could be either person or a group of people.
The stereotype of an angel investor is someone who is a hardened business entrepreneur who has amassed great wealth but is always ready to create more. The image is of someone who swoops in, evaluates the business plan, does some inquiries and then funds a startup with the expectation of high returns. In reality, the angel investor may not be wealthy but is financially savvy. Many are still employed but looking for a way to grow their money by promoting innovative new businesses.
Angel investors fill a gap that exists between the venture capitalist and the commercial lender. Venture capitalists and financial institutions lend larger amounts with the former willing to accept high risk and the latter expecting minimized risk. Many angel investors invest smaller amounts of money, $20,000 instead of $200,000, but there are no limits so $500,000 up to $2 million is possible. They don’t want to play an active role in the business, but do have business savvy. Mostly they just want to make money.
Angel investors are also groups of people who pool their money to fund startup businesses. They include investment clubs, professional groups like doctors or lawyers and even other entrepreneurs. The reason there is a bit of mystery surrounding angel investors is simply because they keep a low profile, so are difficult to categorize. What you do know is that they are financially savvy, thorough in their evaluation of businesses and hopeful of earning a high return on their investments. So don’t stereotype angel investors because they can be anyone.
More detailed information and useful advice can be found at www.funded.com Created by Mark Favre, it offers expertise and assistance with developing and funding your concept, including a private forum for queries and discussions. If you need access to investors and funding providers, please do check our website.