If you are an entrepreneur who believes your business has the potential to scale, it might be worth looking into angel investing. Angel investors can help entrepreneurs by funding their startup and giving it the boost it needs to get off the ground. However, not every company is a good fit to receive angel funding. Here’s what you need to know about angel investors and whether they are right for you:
What Do Angel Investors Do?
An angel investor is simply a wealthy individual who provides funding to startups that they believe have potential. In exchange for this funding, the angel investor usually receives an equity ownership interest. These angel investors tend to be retired entrepreneurs who are looking to invest in something that they are passionate about and want to give back to the community.
Angel Investors Versus Venture Capitalists
Angel investors differ from venture capitalists in that they are putting a lot more faith in your startup to grow and provide a return on investment. Unfortunately, there is a high rate of failure for startups. Venture capitalists will wait until your business can prove it is on the path to success, while angel investors will look for startups that they believe have scalability and hope that their investment pays off.
Should Your Business Rely on Angel Investors?
Angel investors have helped many entrepreneurs grow their business and find success. According to the Center for Venture Research, angel investors contributed $24.8 billion to startups in 2013. Needless to say, angel investors play an important role in helping some businesses get off the ground. However, they are not for everyone. Here are some factors to consider before pitching to an angel investor:
How much control do you want?
Angel investors provide entrepreneurs with valuable funding and mentoring that could potentially have an enormous impact on their success. On the downside, it does mean that entrepreneurs may have to give up some control of their business. Angel investors like to have a board seat or some sort of advisory role when they fund your business. While some see this as a worthy trade, others will want to be fully in charge.
What type of business do you own?
If you own a business that relies heavily on people to grow successful, then angel investors probably won’t be interested. For example, cleaning businesses or consulting businesses are not the types of enterprises that angel investors are looking for. They want a business that can expand quickly and economically.
Where is your business at currently?
Angel investors are better suited for businesses that are past the early startup phase and now need funding to take their business to the next level. If you only plan on making your one store a success, angel investors will not be interested. Businesses plans that include a clear path to wide-reaching expansion are preferred by angel investors.
Put Your Business on the Path to Success
There are many ways in which an entrepreneur can successfully grow their business. Teaming up with the right angel investor could be the perfect opportunity for some small business owners. Whether you decide to seek out angel funding or not, every entrepreneur needs a professional workspace to maximize their productivity. YourOffice Ballantyne offers a wide variety of workspace solutions that are designed to take your business to new heights. Put your business on the path to success and contact YourOffice Ballantyne today!