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Get Angel Investment In Your Startup

Creation date: 2022-07-07 / Modification date: 2022-07-07 / View count: 30

An angel investor is a wealthy person who provides financial support to small startups or entrepreneurs, usually in exchange for a stake in the company. Often, business angels are in an entrepreneur's family or circle of friends. The funds that business angels provide can be a one-time investment to help the company get off the ground or an ongoing financial contribution to support the company as it enters the market.

Angel investors are individuals who seek to invest their own money at the start-up stage. This type of investment is risky and usually represents only a few percentages of the angel investor's portfolio. Most business angels have excess funds available and seek a higher rate of return than traditional investment opportunities.

Angel investors focus on helping startups to go on the market rather than on the immediate profits they can make from the company.

They are individuals who inject capital into startups in exchange for equity or convertible debt. Usually, a startup in need of cash welcomes this opportunity. They find angel investments much more attractive than other forms of funding.

While angel investors represent individuals, the entity providing the funds may be a limited liability company (LLC), a corporation, a trust or an investment fund. The effective internal rate of return on a successful portfolio for angel investors is about 18-20%. While this may sound good for investors and seem too expensive for start-up entrepreneurs, cheaper sources of financing, such as banks, are generally not available for such business ventures. This offer makes angel investors ideal for entrepreneurs experiencing financial difficulties during the start-up phase of their businesses.

Angel investments have grown over the past decades, as the appeal of profitability has allowed it to become a primary source of funds for many startups. Angel investments, in turn, have fostered innovation that translates into economic growth.

 

Article written by : Pier Tsaguria and Tengo Khutsishvili
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