Wed 22 Aug 2007
Finding Angel Investors
Angel investors are the people who invest in a new company that has innovative ideas and potential to grow. However, they are different from venture capital firms in that they provide the start up capital from their own funds, whereas venture capitalists borrow money from other sources for the purpose of investing in companies.
For better accessibility to angel investors, many companies have resorted to organizing themselves into different networks and groups.
So how does someone find an angel investor? Well, some angel investors have formed groups so as to concentrate their capital into a single fund. Many entrepreneurs prefer angel investors to banks and other financial institutions since the latter consider some types of small businesses, especially startups, too risky for investment. Here are a few tips on finding angel investors:
- Search online: You can find many angel investors directories and their locations via Google. Once you have located them, all you have to do is submit you business ideas and plans. They will inspect your plan, and if they find your ideas interesting, they will contact you for a more detailed discussion.
- Ask at home: There is no better way of finding an angel investor than in your own home! Ask your family or even your friends to lend you some money, but always treat them as loans to be payable at a pre-set rate of interest.
- Search obvious sources: Research your networks. Ask your accountant, banker or even your legal representative. They will surely know some angel investors — and if you come to an investor as a referral, they may take you more seriously.
If you're searching for funds to start or grow your small business, an angel investor might be just what you need!