We all have been listening to stories from childhood about angels. But do you this term is used for investors also. Now you will be surprised to relate angel with investors. Yes, it is the special term given to the investors who help startup businesses with funding support. In that way, they get a boost to rise from the ground level. That is why angel investors and startups are interlinked with each other. Today, I am going to put a flash on the topic of angel investors and will also let you know what they seek in a startup business. But before that let us know more about angel investors.
What Are Angel Investors?
Angel investors comprise person to person or a team. Their main objective is to provide some percentage of money to the needy startups for seed capital in their infant stage. You can also term it as equity financing. All these tasks initiated by angel investors have become very helpful for those who have newly set up their startup businesses. This gives them the boost to expedite their business in running it smoothly.
It is the wealth and readiness that makes angel investors capable of investing in a startup firm. Well, investing in a new business is indeed a risky task, but investors do it in expectation of a high return on investment. You must have heard the racing story of hare and tortoise, where the latter won to the former one. But it is not applicable for angel investors. All I want to indicate from this example is they can’t be slow and patient like a tortoise. Rather they want to see the speedy growth of their acquired equity.
Angel investors cannot be categorized as accredited investors. Because they are those investors who possess around $200K of annual income. Shares are being made to sell to these accredited investors by the businesses without adhering to any regulations in comparison to those investors who are not accredited.
Functioning Of Angel Funding
This is something that you need to know. Startups who are looking for angel investors or vice versa come to the negotiation which is done on the basis of investment of money. The angel investors also ask about the stake in the business that involves them. Betting on startup companies to invest in is not that easy for angel investors. It is not done in one single day. It might take more than one meeting and presentations. Besides this, investors also analyze to know the industry well. Plus they also enquire about in-depth and sealed business planning.
What They Seek In Startup Business?
After knowing briefly about how angel investors work, now let me take you to another angle of the subject. It is about what angel investors seek in a Startup business? So below are some of the prominent factors to know it.
Robust Business Planning
A robust business planning is something that angel investors check out in a startup business. All they are curious to know is the new innovative approach to the business and marketing plan for its growth and future capability to compete with rivals.
Another factor is leadership skills. They applaud those who know the art of scaling their business upwards. And they also confirm whether the particular startup business is safe to be run under an able administrator having excellent leadership qualities in different fields including sales and human resources.
Reasonable Ground To Invest In
A startup firm must be extraordinary in its approach to drag the attention of angel investors to invest in. They won’t be interested in any idea which they are familiar with. So don’t try to imitate anyone and come up with a new distinctive approach. Only then your startup business will make them convinced and would make them invest in it. Platforms like Startup Paisa helps startup firms who are looking for angel investors with the purpose to raise seed capital for their businesses.
Sturdy Return And Working Strategy For Exit
Next comes the factor of sturdy return. Angel investors hope for getting a sturdy high return on their provided funds. However, it can be too risky. Coming on to the next point, angel investors are smart enough in knowing the number of working strategies for exit regarding investment.
So these are the factors that angel investors seek in a startup business. I hope you find this blog very helpful in knowing about the angel investors, how they are helpful to startups, and also the factors that they look for in a new business venture. Apart from it, I would like to draw your attention to Startup Paisa. It helps startup businesses in finding the angel investors so that they get a boost to uplift their business with satisfactory seed capital provided by them. On the other side, it helps angel investors in streamlining deserving businesses to invest in.