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Angel Investing: Where to Turn to For Help
from: ForsgrensAngel investing is really heavenly.
If you have no idea what angel investing is, here is a quick definition:
Angel investing is when a well-off individual decides to provide you, from his own pocket, the capital you need to get your business off the ground.
So what makes angel investing different from venture capitalism?
Well, with venture capitalism the investors use the money of other individuals.
With angel investing, however, the “angel” provides you with the funds from his own pocket.
What difference does it make where the money comes from?
Put yourself in the shoes of an investor: how much would your attitude change if you were part of venture capitalism and if you were part of angel investing?
It’s all connected with the money, right?
If you were a venture capitalist, you would handle the investors’ money more loosely.
Of course, other people chose to gamble in your choices, right? So you wouldn’t really need to worry about losing your own money.
There are also sets of rules that venture capitalists adhere to.
It is not their money, after all.
So it would not matter how good a person the investor is, if you do not conform to their standards, you are out.
In angel investing, however, the angel has a much higher risk. It is his money, after all. So in angel investing, the “angel” needs to be very careful in the choices that he makes.
At least, a smart angel would.
In angel investing, however, the angel bases his choices on what he wants.
If you convince him/her that your company is worth the risk, the angel may decide to give you the funding in exchange for some securities.
Unlike bank investments, angel investing is very much available for starting businesses, just as long as those businesses show the right potential.
In angel investing, you may also find a strong financial and management advisor, a mentor if you will.
Unlike with venture capitalism where you deal with the company, with angel investing, you deal directly with the person.
And that person is most often a retired businessman who wants to pass some of his business skills on to someone worthy.
You can compare it to a wizard passing on his magic to the apprentice.
With angel investing, the investor most often does not need such high returns as required by venture capitalists.
This is because angel investing is done because of reasons other than monetary ones.
There are people who are into angel investing because of the excitement of discovering companies with the potential to change the world.
There are angel investors who want to see the money they have acquired be used to help grow a certain demographics’ business.
There are those into angel investing just because they see in some small businesses the image of themselves struggling for some funding.
Whatever the reasons, the idea of angel investing is just... heavenly.
If you have seen the movie “for love or money (1993)” starring Michael J. Fox, you will have an idea of just what angel investing is like.
In this movie, the hotel concierge has a brilliant plan for a hotel... he only lacks the funds. In a strange twist of fate, his plans go to a hotel guest who admires the way he treats guests. The guest turns out to be an angel investor and provides the funding.
Does it sound unrealistic?
Who knows, it could happen to you.
Angel investing, after all, is a miracle waiting to happen.
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