What are angel investors?

Angel investors are high-net-worth individuals who get an equity stake in return for their financing. They expect to make a profit and usually have business expertise they share with you to help your company grow.

What are some advantages for getting angel investors?

These individuals like to invest in personal areas of interest and in people they believe in. They’re typically experience entrepreneurs willing to mentor and coach you and can even introduce you to potential customers and investors, help you identify potential problem areas, and will generally help you gain credibility and recognition in your industry.

What are some disadvantages for getting angel investors?

With this type of business funding, you’re committing to a long-term relationship with an investor who has a serious interest in the success or failure of your business. Ceding some ownership and influence over your business goes hand in hand with equity financing, and if that’s not something you’re ready for, opt for debt financing.

Pro Tip

Check-out AngelList, LinkedIn, Crunchbase, and other industry specific investment related sites.

Businesses best suited for angel investors, or equity funding, are typically high growth businesses that have the potential to grow tremendously in the next 2 to 3 years. If you don’t have those kind of growth plans for your business, this isn’t the right kind of small business funding option for you.