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Getting Started with Angel Investing

What it is: Angel investors might be professionals such as doctors or lawyers, former business associates — or better yet, seasoned entrepreneurs interested in helping out the next generation. What matters is that they are wealthy and willing to invest hundreds of thousands of dollars in your business in return for a piece of the action.

How it works: Generally, the angels need to meet the Securities Exchange Commission’s (SEC) definition of accredited investors. They each need to have a net worth of at least $1 million and make $200,000 a year (or $300,000 a year jointly with a spouse).

Angel investors give you money. You sell them equity in the company, filing the investment raise with the SEC. Angel investments commonly run around $600,000. Most investments rounds also involve multiple investors, thanks to the proliferations of angel groups.

Related: What Angel Investors Want Now

Upside: Angel investments can be perfect for businesses that are established enough that they are beyond the startup phase, but are still early enough in the game that they need capital to develop a product or fund a marketing strategy.

Many businesses receiving angel investments already have some revenue, but they need some cash to kick the enterprise to the next level. Not only can an angel investor provide this, but he or she might become an important mentor. Because their money is on the line, they will be highly motivated to see your business succeed.

Downside: You could be giving away anywhere from 10 to more than 50 percent of your business. On top of that, there’s always the risk that your investors will decide that you are the business’ greatest obstacle to success, and you could get fired from the company you created.

Continue reading:

https://www.entrepreneur.com/article/52742

  • Fri Aug 26
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Luca Peyrano, CEO of ELITE - London Stock Exchange Group

London Stock Exchange Group proposes a unique programme, ELITE, an integrated service designed to help SMEs prepare and structure for the next stage of growth through access to long term financing opportunities.It targets SMEs with a sound business model, clear growth strategy and a desire to obtain funding in the near future. It now accounts for more than 200 companies of different sizes and sectors, more than 150 partners and more than 70 long term. Enjoy the exclusive interview with Luca Peyrano, Head of Primary Markets Continental Europe, London Stock Exchange Group

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