Things Angels Bring To the Table
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Angel investors are private individuals who typically provide the necessary capital for small businesses in their startup phase. Many times, entrepreneurs have exhausted all of their own personal and borrowed funds for their businesses and do not qualify for bank loans or venture capital funding. Angel investors make it possible for small business owners to raise capital in order to make their productive ideas a reality. Angel investing is a large and lucrative market, encompassing at least $30 billion per year, which is two times the amount of the venture capital market.

Classic characteristics of an angel investor
The typical angel investor is male, with an average age of 48-59 years. He is college educated and often times possess a graduate degree. The majority of angel investors, about 80%, have some form of entrepreneurial and industry experience. They are often successful self-made millionaires, with a net worth between $1 million and $10 million. The typical angel investor can invest from $25,000 to $250,000 per deal; however, the amounts may vary and can be much higher (anywhere from $150,000 to $1.5 million).

VC’s versus angel investors
If a venture capitalist agrees to finance an early-stage business, the new entrepreneur will have to raise more money than needed since VC’s, on average, tend to invest larger amounts of money (at least $500,000) per deal. In addition, the new business owner will be bound to give up a larger stake of their company to these investors at a much lower valuation. On the other hand, when an entrepreneur obtains funding from an angel investor, he/she will be allowed to keep more equity and raise less capital since angel investors tend to invest smaller amounts of money per business deal. Currently, there are more than 300,000 active angel investors in the United States, but the potential pool is much larger since there are millions of wealthy individuals with the discretionary net worth to make angel investments.

Angel investment revenue
The angel investor market has an overall promising financial potential with much risk involved. For example, through pre-IPO (or pre-initial public offering), angel investors can dramatically increase their returns by buying stakes in a young enterprise before the company goes public. This type of offering can be quite risky, especially if the invested company does not perform well and/or if the company does not go public. This is one of the many risky types of opportunities that angel investors are aware of and is the driving force behind many of their unpredictable investments.

Many wealthy people, on the other hand, may resort to a safer alternative in investments. By choosing to invest in stocks, treasuries, and high yield interest accounts, they are able to avoid the financial stress and peril of losing their money in angel investments.

Angel investor wisdom
An angel investor will not just provide the needed capital for a new business. Their knowledge and experience in a particular industry can greatly benefit early-stage companies, where they can mentor and provide great insight to entrepreneurs on how to successfully develop and expand their new businesses. It is crucial for the entrepreneur to be proactive and properly select the right angel investor, especially those with a solid history of entrepreneurial experience in their industry. Equally, angel investors should perform effective due diligence practices on the new entrepreneurs, their partners, and management team before making any financial agreement.

Additional value of angel investors
In addition to mentoring their business partners, angel investors can also help improve an entrepreneur’s business plans. Since they play a significant role in finding helpful solutions to propel a company’s growth and success, they can easily work side by side with the entrepreneur in tailoring their business plan according to what they believe is the most effective policy.

Known for their "value events," which can improve the overall worth of a company, an angel investor is an important and constructive member of any team since they have the knowledge and skills to increase a business’ chance for success. This can entail recruiting strategic partners and a competent management team, as well as developing additional financial resources for later expansion. Depending on the invested company’s financial progress, angel investors can also actively reorganize the company to merge, go public, or sell-out.

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