What is an Angel Investor and How Can You Find One?

Angel Investors – sometimes known as 'Business Angels' or 'Seed Investors' – could be your ticket to getting your start-up off the ground. Angel Investors provide entrepreneurs with the capital they need to get started, but there's a price to pay. Despite the name, don't think that Angels do it purely from generosity. An investor will almost always want something in return, whether that's a convertible debt or a stake in the ownership of the company.

Angels can come from different places, whether they're friends and family, wealthy individuals looking for an investment or collectives. Many will have a business background themselves and may get involved for a number of reasons beyond the purely financial. These could include a desire to keep up-to-date with what's going on in their industry, or simply wanting to continue a little work after retirement.

There are lots of advantages to accepting an offer from an Angel Investor. For starters, there's the ready capital. Cash-in-hand is difficult to come by as a small start-up, and the offer of funds is always going to be a tempting offer. There's also the added advantage of gaining a mentor, someone who can pass on their advice and give you the benefit of their experience. Many start-up owners make mistakes early on, and those can prove fatal to a new business. With that added guidance, you may be able to avoid the worst of the pitfalls.

Now come the downsides. The money may be tempting, but you have to ask yourself if it's worth it when you lose having complete control of your company. Angel Investors will expect to have a say in how it's run and the direction of travel, as well as taking their portion of any profits. This is something you'll need to weigh up very carefully before deciding if you want to accept an offer. Once it's done, there's no going back!

If you do decide Angel Investors are the route for you, then start looking online. There are plenty of sites which match investors to start-ups they may be interested in, and it's the quickest way of finding your own Angel. Advertising your company online and saying you're looking for Angel Investors is the quickest way to make that relationship.

Just be cautious in your approach. They will drive a hard bargain and you'll need to think long and hard about what they offer.