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What you should know about angel investors

In today's ever tightening economy it has becomes more and more difficult to obtain financing. This is especially true if you are looking, for financing, for a startup or existing small business. Many lenders feel that there is simply too much risk, in lending to a business owner that does not have extensive experience and assets. This has lead to many small business owners turning to the option of finding angel investors. However, a primary factor in being able to attract the attention of angel investors is to know what you are looking for. Here is what you should know about angel investors-

- Know the profile-Experienced business owners have put together a profile of a typical angel investor. Know what this profile is will help you see who you are looking for and where to find them. Here are some guidelines to get you started:
1. Demographics-A typical angel investor will be between 40-60 years old. They will earn over $100,000 a year but will typically have a net worth that is higher then a million dollars.
2. Experience-Most angel investors will have had experience in running their own business. Because of this past experience as business owners, they will typically want to be involved with the businesses they invest in. In addition, it is important to understand that most angel investors will only invest in businesses that they have direct experience with.
3. Investor profile-Most angel investors will want an investment that they can keep money in, for at least 7-8 years. Most business owners find that angel investors will put in up to $150,000 dollars individually, or they will pool their money with other investors. In addition, most angel investors will find investments through a referral proves, which means that even if they choose not to invest with you, they may refer you to another angel investor. The biggest determinant as to whether a business owner will invest with you is the growth potential. You must be able to show that your business has a high growth potential, since angel investors will be looking to receive a high rate of return, on their money that they invest with your business.
- Start locally-Most angel investors are going to want to play an active part in their investor. This means that they will want to be able to drive by and see how things are going. Because of this you will have a much better chance of getting help, from an angel investors that is nearby. So when you start your search, it should be done locally.
- Networking can help-Because the referral process is so important in gaining the attention of angel investors, you need to make sure that you are networking. One of the best ways to do this is to become very active and visible in the business activities in your community. You can find angel investors at your Chamber of Commerce, trade and business alliances and any other places that business owners gather. In addition, it can be helpful to talk to other business owners who may be able to give you leads on certain angel investors. Attending trade shows and other events in your community can also be helpful in gaining further name recognition, for yourself and your business.
- Only as a last resort, go online-If you are still unable to find an angel investor then you may want to try to search on the internet. Because of the close proximity that angel investors want to their companies, this will reduce your chances, but it is still worthwhile. You may be able to get your business noticed by a much wider group of angel investors, who have the potential of helping you.

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