Finding Angel Investors

In this discussion, we are going to focus on the issues as it pertains to acquiring investment capital from angel investors. When looking for angel investors, the most common issues that you're going to face is having to deal with the issues pertaining to negotiation in regards to the equity percentage that you'll ultimately need to sell to this individual or group of individuals by the that will provide the capital that you need to expand you want your business from the onset operations. Time and time again, we'll continue to discuss these issues as it pertains to the pertains to having the appropriate counsel in place so you can effectively negotiate the appropriate amount of equity high that should be provided to an angel investor or a new investor group in order to get the most value for the business that you have or that you're looking to start as you progress and operations.

 

The most common issues that people have, as it  pertains to raising capital from angel investors, is that many times people have found that these demands that require angel investors to put money with your business are extremely high. This is primarily due to the fact that starting a new business is a risky venture for anyone. If you are launching a new business then you may find that having an angel investor put up the appropriate capital in order for you to launch the operations of the company that you're looking to start up may range anywhere from 20% to 80% of the equity that you have in your business. As such, one of the most important things to recognize so that you able to start a business is that a significant amount of control may be ceded to an investor when you are looking for angel investors.

 

Prior to having any new investor finance the expansion of your business you will be in a much better position as it relates to acquiring capital that will finance the ongoing growth of your business if you business has already commenced operations. This is primarily due to the fact that if you have something painful to offer to angel investor or group of angel investors then you'll be in a much better bargaining position as it pertains to acquiring additional capital that you need in order to expand the growth of your business over the any significant period of time. Typically, angel investors are looking for a smaller portion of equity than their venture capital counterparts; however, they are still looking for a substantial return on their investment on a year on year basis.

 

Most angel investors are looking for a year on year return of approximately 20% to 35% on their money compounded on a yearly basis. As such, the companies that are most apt to receive angel investor financing are those companies that are able to produce results as it relates to increasing the value of your business over a significant period of time. In today's economy, the demand among angel investors to invest in new businesses has waned substantially.

 

Although we have strayed from our initial focus of this topic, when seeking out angel investing capital there are a number of different portals that you can use in order to find the private investment capital that you're seeking. One of the new products that the TheFinanceResource.com has offered is that we can now actively assist you in placing capital falls for the amount that you're seeking as it relates to the development or expansion of your business. We strongly recommend that you review the new service offering that we have from this website as it pertains to but connecting with angel investors or groups of angel investors in order to acquire the capital that you are seeking.

 

If, an angel investor contacts you in regards to expanding your business you are going to want to immediately have the appropriate professionals in place that will assist you in making the appropriate deal negotiations for the capital that the this individual or individuals are willing to make into your business. In doing so you will, you will have a much better understanding of the capital raising process while currently having professionals assist you in providing a potential angel investor with the anticipated valuation and current valuation of your business. Working with a new investor, you need to be aware that this individual, again, is seeking a significant return on their on their investment, but they're also looking to provide you with the appropriate mentorship in order to ensure that the business grows appropriately. If you are a new entrepreneurial venture then it may be in your best interest to work with an angel investor that has a significant amount of experience in the field that you're operating within. As such you will be able to not only receive the capital you need in order to start the business but also you will be in a position to have individual angel investor who will sit on your board of directors while currently providing your business with the advice, on an ongoing basis, as the how you can expand the business that you have developed or are intending to expand.

 

For the time misconceptions and working with an angel investor in fact this individual or group of individuals will provide you with a load for the capital you need to grow work spend your business. However, this should not be in your mind at all as you progress through contacting angel investors and working with angel investors as it pertains to your capital raising needs. This is primarily due again to the fact that these individuals are looking for substantial return on their investment and are not looking to provide your business with the loan as it pertains to the funds that you need. If you are looking simply to receive a load for your business then you should recommend that you approach a bank for an SBA lending that financial institution that can assist you with this process. When you meet seek equity capital, you are essentially selling a portion of your business to a third party with their intentions of generating a substantial workload on their investment as time progresses. As such there are some alternatives in regards to angel and bastards that you can use when looking to raise additional capital for your business. As stark in this discussion as a relates to royalty-based financing, you can develop a hybrid model that allows you to effectively sell a smaller portion of the equity of your business to a third-party walk-on currently paying them a monthly fee for the capital you have used or have acquired this order to expand the growth of your business. This is become one of the more common ways of financing a business that you can effectively became a substantial amount of ownership of your business while firing the capital that you need from an angel investor.

 

When seeking angel investment capital for working with angel investor isn't it parrot of for you to understand that this individual does one have a significant amount of control over your business. As such you can again anticipate that depending on your capital needs the new investor or angel investor group that you're working with will essentially require the fate of purchase a 20% to 80% equity interest in your business. For many entrepreneurs that have worked extremely hard to develop a new concept, or to develop a new type of business, or to develop a unique business venture you may find this to be disheartening. Again it, it is important her member that these groups are the people are essentially good provide you with the capital that you need in order to launch or business operations. As such, it is important to understand that from their perspective they are taking the full capital risk as it pertains to expanding and growing your business. As such one of the key things to remember is to have the appropriate counsel place that actively assist you in negotiating how you can get the best deal possible for the capital that you're seeking.

 

The common things it is often brought up when working with angel investors is that these individuals are willing to negotiate larger extent than their venture-capital counterparts. This is primarily due to the fact, again, that these individuals are seeking to become a more integral part of business rather than just having providing you with capital that you need to launch or business operations. As such, he will be able to not only get the capital that you need by working with an angel investor but he will also be able to effectively have a mentor that is able to provide you with appropriate and diligent device as a relates to growing your business.

 

As it pertains to the profile of a standard angel investor, the most common traits among these individuals is that they have been successful in their respective fields and typically have a net worth ranging from $1 million-$5 million and an annual household income of $250,000 to one million dollars per year. Additionally, these investors are seeking to make investments ranging from $50,000-$250,000 as it pertains to your need for capital. As such, the best types of angel investors are for those individuals or companies that are seeking less than $1 million per year in investment and have a new or growing business that needs a moderate amount of capital in order to further its growth goals. As you review different angel investor profiles you should keep in mind that as you are approached by these individuals, each different angel investors that you work with is going to have different expectations and different ideals as it pertains how cute how your business should grow. As such, time and time again, entrepreneurs have unrealistic expectations as it pertains to raising capital from an individual third-party or group of angel investors that work in a semi-venture-capital capacity.

 

 

As will discuss an additional article, one of the ways that you can work with an angel investor like organization is by using a small business investment company or SBIC to assist you in raising capital for your business. These companies actively work very much in a very similar capacity to angel investors in that they provide both equity and debt capital for your business, and they are licensed by the small business administration to provide your business with capital on terms that are friendly to you. If you decide to purchase our informational package pertaining to angel investment and investment by third parties then you'll find a number of different small business investment companies that are out there located within your state and located within your specific geographic area that have specific interest in providing you with both the debt and equity capital you need in an angel investment like capacity whole currently providing you with a strong return on your equity as you continue to grow your business.

 

 It is important, again, to note that as you progress through your capital raising operations you are going to face significant hurdles as it relates to the negotiation process. These firms, again, are in the business of generating a substantial return not only for their own operations but also for their investors that have provided them with the capital that they need in order to make investments in the third-party companies. As such, you need to be aware of all the different financing options that are available to you prior to making decisions to seek out a new investment capital. If you are already in existing business, then finding options that are available to you as it pertains to raising capital are far greater than those that and individuals looking to start new businesses. This, again, is primarily due the fact that if you all already in operational business that is generating a positive and cash positive then you will have  your angel investor group of angel investors far more interested in providing a significant investment into your business than in a  new startup business that does not have any proven history. Unless you are an extremely well-known expert in your field, you are going to find that raising capital for good your new venture is going to be an expensive and arduous process that can take up to a year to complete.

 

As it pertains to the timeline for raising capital for working with an angel investor group of angel investors you can again expect that it will take anywhere from three months to 12 months in order to appropriately raise the capital you need to the sources that you are seeking.

 

The most important aspects to raising capital from an angel investor is to have a very well developed business plan that will effectively show exactly what you intend to do with the capital that you're seeking and the anticipated financial results that you will have from the business over a five-year period, In doing so, you will provide the your potential angel investor with a complete understanding of your operations, the market that you're operating within, the industry that you're operating within, and whether he expected valuation the business debate over a five-year period. The most important aspect when working with it as an angel investor, is to understand that ultimately this individual is looking to make a 3 to 5 year investment in your business with intent to ultimately resell the their interest in your business to a third party back to you for a predetermined earnings multiple. As such, you should be constantly aware of the free market valuation of your business as it pertains to raising capital from an angel investor, a group of angel investors, a small business investment company, or a venture capital group. This is often overlooked by small business entrepreneurs as they focus primarily on the income of the business and not on the valuation of the business when it comes time to sell the company to another party. One of the things that we will continue discussed throughout our discussions as it relates to angel investment capital and venture capital is the valuation of the of your business as time progresses on a year by year basis. When it comes to raising money from an angel investor, it is imperative to have a complete of understanding of what the business is ultimately worth should you decide to sell it to a third party for a significant earnings multiple.

 

Ultimately, if you decide to go down the road of working with an angel investor as it pertains to your capital raising needs as well as your mentoring needs as it relates to expanding your business then you want to make sure that the investor has a clear understanding of the value of the business on an ongoing basis not only in regards to book value but also as it relates to be salable value of the business. This is primarily due to the fact that this is where most angel investors, angel investor groups, small business investment companies, venture capital firms, and other funding sources to make their money. Most angel investors are  not looking directly dividends that will be received on an ongoing basis, but rather the ongoing saleable value of the business as time progresses.

 

As time progresses we continually discuss issues pertaining to working with angel investors, raising money from angel investors and angel investor networks, as well as the valuation of your anticipated business as you progress through your company's operations. We thank you again for tuning in to our discussions as it relates to raising capital from angel investors and will continue to supply you with new information as it relates to generating the investment capital that you need in order to launch your operations or expand their operations for your business venture.



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