angel investors – wealthy individuals who invest their own money into small businesses in exchange for a stake or shareholding in the business
Note: Angel investors are also known as business angels, seed investors or private investors.
To remember what angel investors means use the following mnemonic:
Angel investors (angel investors) in the clouds give money to small companies in return for a share of the business.
The best way to remember what these terms mean is to think of the most famous angel investors or business angels that appear as investors on TV shows such as Dragons Den and Shark Tank. Angel investors are usually single investors who provide money to businesses who cannot get a bank loan to help start or grow. They usually want a share of the ownership (shares) or a high rate of interest on their investment, that is, far more money than they first put in. Angel investors can also help the company by providing advice, mentoring, contacts and feedback. Angels are typically experienced and have a track record of being successful. There is a lot of risk involved for the investors, but by investing in the right people with the right ideas, the return can be huge. Just as in Dragons Den or Shark Tank, you will need to pitch your goals to the angel investor, detail your product/service, how it differs from all other companies, who your current clients are, what you aim to use the investment for and what is in it for the investor (how much of the company’s shares are you prepared to give the investor). Most importantly, you must prove that you are a responsible, professional, calm individual that can carefully craft a brilliant team around them, work extremely hard and be prepared to put in long hours. You must prove that you can take advice from the angel investor and have a great future working relationship. The best place to start looking for angel investors is on the web.