We all know what important an entity small businesses have come to be, especially in these times of recession, but in order to start one, we need to look for a private investor, angel business capital is provided by them and one can bank on them to see their business through. Why are small businesses so prominent today?
• Seventy five percent of the new jobs created today come from small businesses; in fact, small businesses gain billions of dollars all in the USA alone!
• Small businesses often grow into large concerns which have a prominent global presence.
• During times of recession, people are willing to invest small amounts of money, rather than a whole lot.
So what should you do while courting a private investor, angel business capital or venture capital firms? You need to be smart about the choices you make before you start out on your business. Make sure you only go with accredited angel investors, who are sophisticated. By sophisticated angel investors, I mean people who have experience in the industry you are choosing to work in, they are the “been there and done that” type. It’s much easier to work with them, trust me!
Another mistake which young entrepreneurs make is that they underestimate angel investors. Angels might be a bit more lenient than venture capitalists, but they do care a lot about returns on their investment, so if you think you can rest easy, please don’t be under that misconception. You should also be good at making them feel important by asking their advice frequently on important (and sometimes unimportant!) matters.
Where To Look For Them
Where can you find a private angel investor who is not a relative of yours? The best way to find them is through personal contacts. Angel investors like to know who they’re dealing with and if you have common contacts it actually furthers your case a lot – The fewer the degrees of separation between the both of you, the better.
For private angel investors, angel business capital is provided on the condition that you are close to them. This means that you need to be based quite close to their offices. They don’t like the idea of investing in far off places. So, you could maybe start your search in local chambers of commerce, industry conferencing and of course, by networking.
There is quite a big difference between private angel investors and venture capitalists in terms of perspective. Do keep in mind that angel investors assume quite a high risk by providing your startup company with angel capital so they might interfere with your working to ensure that they succeed and don’t lose all that money. So conflicts are bound to arise if you are not clear on what you expect and your role.
An angel investor is really like a partner in your business, this is one thing you will definitely want to keep in mind while dealing with them. But, with private investors, angel business capital isn’t all that hard to come by, so keep a look out.