Angel private investments typically come from successful entrepreneurs known as “Angel Investors”. These investors offer expertise, experience, and contacts that can be invaluable to the new venture. Angel investors often work in groups to improve the efficiency of their due diligence and to allow them to complete larger deals. Although angel investors require a high rate of return on their investments, they are flexible and willing to wait for an extended time period to receive their return. Angel private investments usually do not desire a large share of ownership in the company, but would rather play an active role in the management and use their expertise to help the business succeed.
Some Interesting Facts:
- Of the companies screened and formally invited by angel groups to present their business plans, up to one-third receive funding.
- Conservative estimates put the magnitude of angel investments at approximately $20 billion per year
- On average, angel investor groups tend to include 85 members who look for a 35% return on their investment.
- Angels fund thirty to forty times as many entrepreneurial companies as the entire venture capital industry
Finding the right type of funding for your business can seem like a daunting task. Or directory of searchable lenders can make this process much faster and easier.
Why angel investor?
If you are like 99% of entrepreneurs, you can’t qualify for a bank loan. The situation facing most new businesses today is that there is a critical need for start-up and early-round financing, but the vast majority of these companies do not qualify for loans from traditional lenders. Yet the fact remains, that start-up companies are still getting financed. Who, Where, and How?
Angel investors have proven to be the single most important players in the entrepreneurial marketplace. Angel private investments consist of funding provided by affluent individuals typically with past experience in the business field. Angel investors are mostly ex-CEOs and business owners that want to lend out their expertise and money to help start-up and early-stage companies. Angels fund thirty to forty times as many entrepreneurial companies as the entire venture capital industry, estimates put the total amount between $20-$60 billion annually. Since venture capitalists typically fund large deals in excess of 500,000 dollars, an angel private investment could be the answer for small to medium-sized businesses who are unable to obtain a bank loan and are not large enough to receive funding from venture capitalists. They are also less strict when it comes to their return on investment. Although their ROI requirements are quite high, the timetable of payment is more flexible than with other investors such as venture capitalists.