An Angel Investor For Small Business Development
If you need capital for small business development then consider using an angel investor or business angel. This is someone who provides capital for the start up of a business usually in exchange for a share of equity in the business.
Business angels typically invest their own money in a business unlike venture capitalists who use the pooled resources of others in a professionally managed fund. Typically they invest where more money is required than can be raised from friends and family but less than would normally be invested by a venture capitalist. Because they bear high risk investments in return they require a high return, typically at least 10 times their original investment within 5 years and with a defined exit strategy.
But investors such as these are often retired entrepreneurs who have more than just a financial interest at heart – they may derive satisfaction from mentoring new businesses passing on knowledge and skills, sharing their experiences and helping them tap into their own business network.
So if you are considering going down this route to gain financing for your business you need to be clear on how much of your business are you prepared to give up and what else you would be looking for in terms of mentoring and support which would complement your own skills to make your venture a success.
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