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Angel Investors, Good or Bad?

by VinF, Window Shopper

  • Created: September 12, 2010, 10:10 am
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4 comments

As the title suggests, I'm interested to see what the community has to say about angel investors and what the possible pitfalls are when dealing with these so called angels.

 

Thanks

Tags: Discuss Popular Topics, Loans & Grants
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JimD | Former Moderator | 9/13/2010 - 5:21 am

Venture capitalists and angel investors are very similar. Venture capitalists usually manage a pool of money from a variety of investors, whereas angel investors usually invest their own money. Take a look at Venture Capital & Equity Capital Programs.

VinF | Window Shopper | 9/13/2010 - 5:12 am

Thanks for that information. So could you explain a little more about venture capitalists? And would they be a better alternative than angel investors?   Thanks.

JimD | Former Moderator | 9/13/2010 - 5:01 am

Has anyone in the community used angel investors and can give VinF some potential pitfalls. One thing to what out for is remember that the motive of angel investors is to make money. Unlike venture capitalists, angel investors are usually investing their own money and make take a very active roll in your company depending on how much equity you exchange for the investment. JimD

BizResearcher | Window Shopper | 9/14/2010 - 8:35 am

Venture capitalists usually become involved in established companies needing funding for growth. Because they usually manage a pool of funds, they are able to provide more money than angel investors. Angel investors are usually individuals or groups of individuals who are investing their own money. Many of them created their own successful companies and that is where they obtained their money. They tend to choose new companies with the potential for rapid growth and a quick return on their investment (such as high tech and bio-tech businesses). They also tend to invest less money than venture capitalists can. Therefore, many companies initially seek funding from angels in the early stages, then obtain venture capital funding after they are established. To insure a good return on their money, angel investors usually seek a seat on the board of directors or take another active role in the company.