Interestingly, a business angel is a private individual with a high-ranking net worth that loves to invest in start-ups. Usually, a business angel also has a huge wealth of knowledge about business and how to grow a small business into a big enterprise. Sometimes, a business angel invests individually or they are part of a syndicate where one person takes the lead.
Furthermore, the major role of a business angel is to help start-ups grow and become stronger. Obviously, a business angel will have a major share in the business and always anticipates huge profits.
Characteristics of a good business angel
Before you reach out to a potential business angel, you need to make sure that they have some of the qualities outlined below:
Invest their own money
A good business angel should be someone who is ready to invest their own money with ease. In addition, a business angel should be able to invest their money without the said investment affecting their financial status. Therefore, a business angel should have enough to invest.
Put their money where they have experience
World-class business angels don’t invest in sectors where they don’t have any experience at all. They prefer to invest in sectors where they are grounded or even own businesses. Don’t forget a business angel is an asset because they can also input their experience to make the start-up succeed.
Love getting involved
Some business angels want to be involved in the process of building the company from the start till it becomes a big enterprise. Don’t be surprised when the business angel comes around for inspection. Even though not all business angels have the time for this, most often find time to visit for site inspections.
The purpose of a business angel
Aside from the business angels’ money, their wealth of experience also matters. Business angels often have a wealth of knowledge in the area they want to invest their money into. Also, you will find out that some may politely teach your staff the best ways to do things.
Don’t be carried away, there are some business angels that can be troublesome too. Sometimes, you may discover that some business angels want to override the owners of the business. Therefore, whenever you are in search of a business angel, make sure you check their pedigree.
Even though investors are hard to come by, don’t be so desperate that you play into the hands of bad businessmen who would take your ideas and company from you when it becomes big. Try as much as you can to get business angels on board who have the right mindset.
Also, don’t forget to have an agreement with the business angel. Make certain that the agreement addresses your concerns and does not take your business away. Finally, always reach out to family and friends first before seeking external investors. In this era finding investment opportunities are very rare but reach out to genuine businessmen and women.