What You Should Know About Angel Investors

Investments come in many shapes and sizes. Some business owners seek investment from high profile investors while others rely on crowdfunding and potential customers. Angel investors are often the preferred choice as they offer capital and usually have large sums of money that they are willing to invest.

If you aren’t familiar with angel investors, then you are in luck because we are going to look at this topic a bit more closely. We’ll look at what they are and what they want in return for their investment. Read on to hear what you should know about angel investors. 

What Is an Angel Investor?

An angel investor is simply an individual who has a high net worth, and an interest making investments in new or small businesses. Angel investors typically seek out opportunities with new and exciting start-ups that have the capacity for significant growth. Many of the most successful investors now hold shares in international companies that were once struggling to find a platform within their industries. An angel investor will usually want to receive equity in the business in exchange for the capital. 

Image Source; Pixabay 

What Do They Invest In?

One of the great things about investors is that they will not just invest in one thing. Usually, those who are seen as angel investors will have a large portfolio of investments, usually coming from one industry. For example, Tej Kohli is a London-based entrepreneur who is known for his investments in the tech industry. Other investors might specialise in fintech or health.

Where Are They Found?

In 2020, angel investors are relatively easy to find, although that doesn’t mean that they are easy to secure. There are many websites that have been set up to allow new business owners to connect with angel investors. These business owners can look at previous investments and how they have grown and make an informed decision on who to contact. Of course, angel investors can also be found by asking around in family or friend circles. Some of the angel investor websites will charge for membership but can be worth it in the end.

What Do They Look For?

Finally, you should know that angel investors won’t usually just invest in a company because they know the owner. They want to make sure that they are going to get a good return on their investment, otherwise, they could be spending their money elsewhere. You should know that angel investors typically look for a return of around 25% in their investments. This might not always be possible, but they will look for information that points towards that being a possibility. 

Final Thoughts

Many business owners are on the hunt for investment, but it isn’t always easy to secure. If a business owner can prove that their business has the potential to offer a return, they could secure the funding with an angel investor. This kind of partnership is mutually beneficial and is becoming much more common.