Who is an angel investor?

Today, it has become much harder, for businesses to find financing through traditional means. This has left business owners looking to other avenues to find the working capital they need, to run and grow their businesses. If you are a business owner seeking additional capital, for your business, you may be looking, for an angel investor. There are many different types of angel investors; however, most of them share certain similarities. Knowing what these are can often help business owners find the right angel investor, for their business. Here is the information that you need to answer the question-Who is an angel investor?

• Angel investors are looking for a higher rate of return-These are investors who are looking outside of traditional investment opportunities. Most angel investors have been successful business owners and now want to pass on their experience and expertise, along with their investment to other small business owners. You should keep in mind that regardless of the fact that they are looking, for a higher rate of return, their rate of investment can vary from several thousands of dollars into the seven figure range.
• Angel investor's share similar financial profile-Studies have shown that most angel investors are in their 40's or 50's. They have an annual income of at least $100,000 dollars and their net worth is often in the millions. They have most often college educated, have spent most of their self employed and typically invest about $40,000, for each investment opportunity.
• Angel investors like to invest close to home-Because of the hands on nature of their investing style, most angel investors will want to put money into businesses that are close to where they live. They want to be able to drive over and check on their investment and see firsthand how it is doing. Studies have shown that 70% of all angel investments are made within 50 miles, from the angel investor's home or office. Because of this investing style, business owners who accept angel investment money, will need to be prepared to give up some type of control, to this investor.
• Angel investors are more interested in businesses that are just starting out-If you are looking for start up financing or are new in the business life cycle, your business will stand a much better chance of gaining angel investor money. Angel investors have a strong interest in seeing growth so they are much more likely to invest in a business that is just starting out, rather then one that has been around for awhile.
• Angel investors can afford to pick and choose their investments-Studies show that most angel investors accept only about 30% of the deals that are presented to them. Some of the most common reasons that investment deals are rejected are that the investment shows a lack of potential for growth is overpriced, has substandard management, or the business plan lacks sufficient information about the business owner and other key management personnel. However, it is interesting to note that many angel investors report that they would have invested at up to 40% more if the right investment opportunity would have come along. This leaves business owners with the responsibility of presenting their company in a way that attracts the angel investor.
• Angel investors will be looking for a working partnership-While other investments can be made by writing a check and walking away, angel investors will be looking to work the people they are investing in. This means that the business owner and angel investor will need to be able to form a working partnership that is mutually satisfying and potentially profitable.