This article are provided for information purposes only, and are not intended as legal advice.


What is an angel investor?

January 7th, 2009

An angel investor is a high risk investor looking to put some play money into multiple different ventures.  Typically these are non bankable ventures, very risky, often start ups.  Angel investors are there when no bank will finance you, when your credit cards are at the max.  Angel investors typically do not put money into your company for you to pay off your debts or creditors.  They only put money in when they know that it will be used for going forward in the business, for expanding the business but never for paying past debts and definitely not for the owner to get some money out of the company.  Because they participate in risky ventures, angel investors look for a high rate of return. Sometimes, angel investors pool their money together and invest a larger amount in one company, other times, an angel investor will put in a certain dollar amount only.  Some angel investors look for a 25% return on their investment. 

 

For every 10 investments risky investors may invest, they hope that 2 are exceptionally successful and 8 investments will either break even or lose money.  The two successful investments normally make up more than the losses on the other investments.


Filed under: Angel Investors — Gary Landa @ 1:24 pm


1 Comment »


  1. […] of people follow numbers because most people are risk averse. Entrepreneurs are in the minority.  Angel investors may support […]

    Pingback by Do you operate your business without checking the numbers? | Businesses for Sale - The Business Place — January 20, 2009 @ 10:20 am


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