Angel Investors are high net-worth individuals who are looking to invest their own money in a business venture for a return on investment. As opposed to venture capitalists, which are institutional investors who invest other people’s money, angel investors are a better place to start looking for funding for two main reasons:
1) there are a lot more potential angels investors out there than venture capitalists and
2) angel investors often don’t have the stringent requirements that venture capital firms have.
According to the Spectrem Group, there are 980,000 American households with net worth over $5 million and
there are 7.8 million American households with net worth over $1 million. These are the ideal angel investors because they are looking for better returns than they can get from the stock market, which has, in many cases, yielded negative returns over the last 10 years. Angel investors are more likely to not require that a new concept has been proven like many venture capital firms do and they may be more flexible in the amount of funding they will provide. Many venture capitalists have minimum investment amounts of $2 million and often new businesses are not ready for this high level of funding. To get an angel investment, you must understand who they are and how to get them interested in your business venture. So if you think that an angel investor might be the way to fund your business endeavor, I invite you to view my friend, David Lavisky’s, presentation on Angel Investor Funding Formula.