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Investing FAQs

Types of Angel Investors

In today’s business world, there are many types of angel investors with differing personalities and motives. Despite this adversity, many angel investors fall into three main categories: Core angels– These investors are individuals with extensive business experience who have operated and owned successful businesses of their own. Their vast amount of wealth was accumulated over a relatively long period of time. They are committed to their job of angel investing and continue to be involved with high risk investments despite ...

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Critical aspects of an Angel Investor

Unlike institutional lenders and venture capitalists, angel investors have diverse backgrounds and perspectives. In fact, their beliefs of a company’s business practices and how a startup should be managed and operated may differ significantly to what entrepreneurs may have in mind. Therefore, some angel investors can be viewed as either beneficial or detrimental to a new company’s success. Since angel investors tend to invest a large amount of personal capital in a small number of companies, their perspectives on startups ...

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How Long Should an Angel Investor Invest In a Company?

The goal for angel investors is to provide capital seed funding for early stage companies with the promise of receiving high net worth in the end. There are many misconceptions about the length of time that an angel investor should invest in a company. Some entrepreneurs believe that once the angel investors give them the money, these angels will simply wait around for years until their funds are returned with interest. Angel investors can be very patient and willing to ...

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Can’t Get a Bank Loan to Buy a Business? Consider These Financing Methods

As the economy struggles to rebound, unemployment rates remain at historical highs and millions of Americans are still looking for work. As a result, many have considered following their entrepreneurial dreams and “creating” their own job rather than relying on corporate America to see them through. While hard times have kept demand for small businesses high and a wide selection of options are on the market, most business buyers are facing one major challenge: accessing the capital required to purchase ...

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What is Angel Investor / Business Angel?

An angel investor or angel (also known as a business angel or informal investor) is an affluent individual who provides capital for a business startups, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors organize themselves into angel groups or angel networks to share research and pool their investment capital. Angels investor capital typically invest their own capitals or money into new business, unlike venture capitalists, who manage the pooled money of ...

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How To Find A Good Investment

How To Find A Good Investment Here are the things to look for: Fills a Need – Make sure that the business actually does something that someone will always want. For example, a business dedicated to bringing you the best housing, or a business that supplies people with books, is a solid foundation. A business that tells you to send them a dollar and pass the letter on is not. Any sort of business which doesn’t fill an actual need ...

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5 Tips on Negotiating an Investment Deal

5 Tips on Negotiating an Investment Deal Last night I listened to attorney Karen McKercher presenting tips for negotiating an investment deal to a group of angel investors (the Willamette Angel Conference members). I think her list of five points is good reading for both sides of the table, both startup founders and angel investors. Here’s a summary (points are Karen’s, and the explanations are my summary): Balanced interest. If a deal isn’t good for both sides, it isn’t a ...

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How is this different from venture capital funding?

Generally, angel investors do not invest in deals greater than $1 million whereas venture capital firms typically are not looking at deals under this amount. As an angel, you make your own decisions as opposed to a board or group of people representing investors that have pooled their money. Entrepreneurs often expect that you may be more involved in the business and may provide assistance in ways that venture capital firms do not. You also do not typically own as ...

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12 Rules for Investing in Someone Else’s Business

12 Rules for Investing in Someone Else’s Business 1. Don’t be “sold” investments. You select your investments. Don’t blindly accept a friend’s or family member’s pitch. If you haven’t established your own investment goals, do not invest in anything until you do so. Without your own goals or standards, you lack a basis for assessing the opportunity. You leave yourself vulnerable to the sales pitch that sounds good. Only get into investments that meet your criteria. Check out the business ...

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