Many of the entrepreneurs starting a new company often wonder how to raise enough money to make sure they're going to move to the next step successfully. After they've exhausted their own savings and appealed to relatives and friends, they could move further and contact an angel investor, who provides startup capital to a new business with a high potential for growth.
Knowledge and experience
One of the advantages is that angels don't invest only money in a new business. They also bring something else of value such as assistance, contacts, experience and vast knowledge. Many of them were entrepreneurs themselves, having founded some successful companies.
Involvement in various industries
Angels invest in almost all markets worldwide. They tend to focus on technology, but are also interested in other fields. What they are attracted by is the potential for profitability and growth. You don;t have a proven history of profitability, but, if you have a good marketable idea, the passion to make it a success and you skillfully present them a detailed business plan, you can obtain the necessary funding.
Local investments
Most angels provide capital for local businesses, as they like to get involved in creating employment opportunities and encouraging clients to buy your products or services. It is a great advantage to find a local investor that has experience in your field, having similar companies in their portfolio.
Although the costs can be quite high and angels will also ask for a seat in your board of directors, expecting a certain amount of control, they have their own good reasons. They request large amounts of returns as start-ups are high-risk investments and it is normal to counterbalance these risks; giving them some control means recognizing the need for their insight and resources, especially if you are a young entrepreneur, with little experience.
Find out more about Seeking Investors.
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