Angel Investors

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Angel Investors

Angel investors and the startup business plan

Angel investors are wealthy private individuals, often with a background in business, who make new investments in startup business plans. Investment by angel investors may be smaller than investments made by a venture capitalist, and angel investors may make a smaller number of investments. However, overall they represent a very sizable slice of the investment pie. This is because a significant proportion of new firms in the US receive funding from angel investors, to the tune of more than $20 billion of investment over approximately 50,000 deals each year. This exceeds venture capital sources, which are estimated at $5 - $7 billion spread over just 1,000 deals each year. So for a small start-up business, finding angel investors can be a smart move.

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Angel investors vary widely, and can often make an investment based largely on "gut feeling". They much prefer to deal directly with the entrepreneur, rather than investment agents / brokers. They tend to invest in local firms, so that they can easily travel to the premises. Each of their investments is relatively small, funding ranges from $10,000 to $250,000. On the whole, angel investors make a limited number of new investments, perhaps just one every two years in startup business plans.

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Angel investors: investing in new business plans

The advantage of angel investors is that they go in where more formal investors will not be interested. In general, they’re happier to invest in start-ups, and often operate at smaller levels of investment than venture capitalists. As most angels are established business people, they bring valuable experience to your business plan and their involvement may make it easier for you to attract other private funders. Angel investors will probably wish to play an active part in your business, bringing their expertise to bear on the growth of their private investment.

There are some disadvantages, however. Angel investors can be hard to find, because they’re often busy running their own businesses! You must be able to work with your investor, so make sure that you both have the same strategic vision for your business plan. While less demanding than other sources of equity finance, such as venture capitalists, angel investors will insist on seeing a business plan first.

There are a few relevant resources on the Internet, such as FundingPost. However, this is one area where nothing can substitute for a face-to-face meeting. Your professional advisors may be able to help you make the initial contact with angel investors, or you may strike lucky after extensive networking among your contacts. But after that, it will be you that is under scrutiny: you, and your angel investor business plan.

That's why it's essential to have a really outstanding business plan. Many novice entrepreneurs call on consultants like ourselves, with a long track record in writing business plans for angel investors and planning for private investments. We have a wealth of experience with startups in search of angel capital and private money. Contact us for professional angel investor business plans.

You can also contact us at 877-334-4780 or if you have any questions on business plans or raising capital from angel investors.

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