Who is an angel investor?
Whether you are trying to get your business up and running or need some additional working capital you may consider finding an angel investor. Many business owners seek out the help of an angel investor because they don't want to take on additional debt financing or they are having a hard time even getting a business loan. However, before you seek out an angel investor it is important to know who you are looking for. Only by having a clear idea of who is an angel investor can you get to work attracting one. Here is what you need to know to answer the question-Who is an angel investor?
Angel investors generally fall into the following categories. While all angel investors are not the same and may not fit all of the listed qualifications below most have at least a majority of these shared characteristics.Common characteristics of an angel investor are-
- Income-Most angel investors make over $100,000 and many make significantly more.
- Age-Most angel investors fall into the age of range of between 40-60 years old.
- Net worth-Most angel investors have a net worth of over $1,000,000 dollars.
- Experience- Most angel investors have extensive and successful entrepreneurial experience. In addition, most angel investors will want to invest in businesses that they have experience in.
- Location-Most angel investors will only invest in businesses that they can physically travel to on a regular basis.
- Expectations- Most angel investors are looking for a short term investment which means that they are only planning on being involved for up to 7 years with some angel investors looking to cash out significantly sooner. In addition, most angel investors will want to be a part of the business and like to play an active role.
- Investment limit- Most angel investors will invest up to $150,000 dollars. However, they may also participate in a syndicate of other angel investors which can then bring the total investment to multiples of individual investments.
- Networking-Most angel investors will refer deals to other private investors even if they have chosen not to invest. In addition, they will also source deals through other referrals that are made to them.
Once you know who is an angel investor then it becomes important to figure out where to find them. There are several different ways that you can seek out the attention of angel investors. Some of these ways are-
- Talk with other business owners-You should never assume that other business owners won't be willing to help you. The business owners in your community can often be a valuable source of information about where to find angel investors. You should become active in your business community so that you can network with other business owners.
- Talk to the bank that you do business with-Your bank management may know of potential angel investors in your community. It is important to check with the financial professionals in your community since most angel investors want to invest in businesses that are close by. You should not hesitate to ask the management at your bank even if you not considering asking for business financing from them.
- Talk to your attorney and accountant-It is important to keep in mind that even in the largest communities the world of finance is fairly small. The chances are high that either your attorney or your accountant (or both), will know of the angel investors in your community. It is important remember that you are paying both of these people not only for their technical skills but their financial knowledge as well so you should not hesitate to ask for this type of information.