Angel Investors

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Find-Angel-Investors-300x200Angel Investors
For anyone wanting to go into business for themselves, there has always been the dream that a wealthy investor would come along and provide the necessary funding. While in many cases that is only a dream, in more and more instances today that dream is becoming a reality thanks to angel investors. Wealthy individuals who are eager to help out the new generation of entrepreneurs, they may be doctors, lawyers, business executives, or other professionals who are looking not only to use their money to help others, but also find a great investment for themselves at the same time. In other words, in exchange for providing funding for a business, angel investors get a piece of the action, so to speak.

Defining an Angel Investor
While many think the term “angel investor” is relatively new, the fact is it has been around for several decades. Originally used to describe wealthy patrons of the arts who invested money to produce Broadway plays in the 1970s, it eventually gave way to those who were looking to invest money in technology and other related businesses. According to the latest figures, there are more than 250,000 active angel investors in the United States, with thousands more located abroad.

Requirements for Angel Investing
Most accredited angel investors within the United States need to be registered with the Securities and Exchange Commission. To be considered an accredited angel investor, a person must have a minimum net worth of $1 million and have an annual income of $200,000 or more. In other countries, the requirements are less stringent. Along with being doctors, lawyers, or business executives, many angel investors are in fact entrepreneurs themselves. Having found success in the business world, they are eager to take part of their fortune and help others realize their dreams.

Angel Investment Groups
As angel investing has become more popular, many of these investors have chosen to band together in what are known as angel groups or angel networks. In most every state within the United States, there is at least one angel group willing to invest money in new projects. In fact, there are usually several groups within a state, giving entrepreneurs many opportunities to find the funding they need. Forming these groups provides several advantages for both investors and the entrepreneurs who are in need of funding. By coming together, the angel investors can share their research on various industries, pool their capital to create even more funding opportunities, and have more people who can provide advice to those just starting out in the business world.

How to Find Angel Investors
While it may sound hard to find wealthy investors for your business, it’s actually much easier than you may think. As with most things today, it usually involves a relatively simple search on Google. Many angel investor groups can be found online, with other sites serving as directories that list angel investor groups in the U.S. and around the world. Some of the most popular sites to use when looking for angel investors include www.funded.com, angel.co, FundingPost.com, and FundingCircle.com. These websites allow the opportunity to examine profiles of angel investors, helping entrepreneurs decide which ones may offer the best chance of funding their business. Most sites also allow those seeking funding to create profiles of themselves, where they can explain their business ideas in great detail. By doing so, many angel investors can look at the profile and decide for themselves if it is a project in which they may be interested in pursuing.

Benefits of Using Angel Investors
As expected, there are many benefits to using angel investors. Most businesses that use angel investors are just past the startup phase, but need additional funding to help develop a new product or expand their marketing capabilities. By using these investors, people not only gain the money needed, but also have access to a wealth of business experience from people who are very willing to give advice and support. The average angel investment is almost $600,000, so for those who receive funding it’s clear they will have many options available to them.

Downside of Angel Investing
While it offers many benefits, using angel investors can also be somewhat risky. For example, in exchange for receiving funding you may have to give up as much as 50 percent ownership in your company to the investors. Also, a situation could arise where the investors believe the company could experience greater growth without you at the helm, so you could find yourself fired from the very company you created. However, in most cases this rarely happens, and overall most who use angel investors have had nothing but positive experiences, which is evident in its growing popularity.

Which Businesses Receive Angel Investments?
While virtually any type of business is open to receiving angel investments, some areas are more popular with investors than others. As expected, technology businesses are almost always at the top of the list. In the United States, almost 40 percent of all angel investments are given to Silicon Valley businesses, with almost $3 billion invested annually in these businesses. Other popular businesses for angel investors include healthcare companies, biotechnology companies, renewable energy companies, IT companies, and even many retail businesses.

Needless to say, with so much money at stake, angel investors are very careful where they choose to put their money. If you are seriously considering pursuing angel investors, it is vital you have a clear and concise business plan and are able to show them some early success that your company is experiencing. Remember, these investors are not only wanting to help your business succeed, but they are also looking to make money themselves. Therefore, they have to see potential for an excellent return on their investment. But if you think you and your business have what it takes to succeed, angel investors can provide the money needed to put you over the top. And when that happens, it truly will be money sent from Heaven.

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