Business Angels

Business Angels represent a unique group of strategic investors. These extraordinary individual investors include retired business owners who are interested in investing in small businesses to encourage the entrepreneurial spirit of the next generation, as well as monetary gain. They will quite often provide incredibly valuable advice, based upon their own success, which can be priceless to a new small business owner.

Those with an entrepreneurial spirit are inherently inspired to start their own businesses; though some will act upon this inspiration, others will not. Those who do not act upon their inspiration will reluctantly struggle to rein in their entrepreneurial spirit and continue to serve their current employer in exchange for their current salary. This may be due to their lacking the capital, or being unaware of the sources from which they can obtain funding of their small business idea. Those who do act upon their inspiration often find themselves funding their startup company with a scattered combination of personal savings, lines of credit, loans, and possibly contributions from investors. This can be risky, but all rewards are associated with some sort of risk, right?

Many dedicated, fortunate, and successful small business owners chose to throw caution to the wind and invested a good portion, if not all, of their personal savings and maximized the use of any available personal credit towards building their business. A good deal of thriving and profitable small businesses began just this way. Long before they themselves might have become a Business Angel, they may have accepted loans from supportive friends and family, though this could and has sometimes put a strain upon the personal relationships of the parties involved. Now, these entrepreneurs have found themselves in the midst of a rapidly expanding small business in need of additional funding in order to continue to grow, thrive, and ultimately profit. The business may, at this stage, need additional lines of credit and readily available funds in order to expand upon or improve their current business model to meet the demand and improve efficiency to generate more revenue.

Investing in small businesses is considered high risk; therefore, many of the typical channels a small business owner might explore in search of investors for their small business may not be appropriate or available. Venture Capitalists tend to be a source of funding for those in need of larger amounts than typically necessary or affordable to a small business owner. In addition, presenting a small business in the best light to an interested yet understandably skeptical professional investor takes a great deal of financial expertise and analytical presentation skills, traits not inherent to beginners. This can be frustrating for the small business owner who has invested so much of himself and dedicated so much time to enabling himself and others to visualize his dream of a successful small business. However, Business Angels, wealthy independent individuals who invest specifically in small business ventures, are available to assist the small business owner in overcoming this current financial challenge.

Business Angels are often consulted as potential investors for the second stage financing needs of a rapidly growing small business, somewhere in between personally funded startup costs and venture capital. Some individual Business Angels have formed groups of Business Angels known as Angel Networks who are interested in investing only in a specific category of business, such as Fast Angels, who only invest in technology companies.

Investing in a new small business is extremely risky, and therefore, Business Angels typically require a high return on their investment. However, less costly sources of capital are not typically available to small business owners at this stage of business growth. Business Angels can provide the necessary funds at the required time, helping to keep your business fully funded and operational, while sharing tried and true strategies for success as your business grows, ensuring both generations of entrepreneurs benefit from the venture.