Reasons, Why Angel Investing Is Considered an Excellent Source Of Capital?
Angel Investing
Angel investors or angel investor funding has nothing to do with the name in literal senses (halo of an angel and golden wings), rather they have more to do with being individuals who are ready to provide the startup capital to businesses that are newly established in return to a particular percentage of the ownership equity in the company. It is quite a common business practice in countries like Europe and United States though the name differs in different countries. United States has the term 'angel' derived from the early twentieth century that had businessmen with abundant wealth that they were quite eager to invest in the extravagant Broadway productions. Though in Europe the “angel investor group” or “angel investors” refers to the 'business angels', financiers who readily provide the equity capital to the growing firms or the startup businesses. There are a lot of advantages of having the angel investing or angel investor funding as against any other form of finance for business startup. Few of those advantages are as under:
Experience in the industry: Most of these Angel investing groups or the angel investors are experienced businesspeople who have had a long time of experience working in the same industry and thus the knowledge that they have about the industry is quite appreciable. As the business is at its stating point the experience of these executives could add to the advantages of the company and thus the angel investor funding is preferred over the other sort of fundings.
Advisors and Mentors: The fact is that these companies are at their initial stages and thus any help at this point of time is more than appreciated. The angel investor groups with their experience in the industry, that they might be having due to their profession or position, are capable of helping the company that they invest in, with their expert advices and mentoring.
Capacity to raise business capital: Once the owners of the company have exhausted all their privileges of arranging money from their friends and family, bank loans, personal savings and credit cards for the startup finances, the best option that they are left with is angel investor funding or angel investing. The researches show that almost two third of the funding for the new enterprises is most often than not gained from the angel investors interested in angel investing.
No monthly fees: Other most appreciated benefit of taking up angel investing as a source of raising capital for a new business is the fact that there are no outstanding payment rates left to be paid at the end of the day for the services availed from the angel investors that most often are left with credit cards or bank loans. They don't even seek any sort of monthly payment, all they wish to avail is a return on investment. The other best thing about the angel investing is the fact that these angel investor groups have a very informal investment criteria as against the traditional money lender groups. The main reason behind the same being the fact that they invest their own money which is why they are capable of providing the flexibility and negotiability in their business deals, another perfect reason they are considered as an excellent source of initial capital for new businesses.
About the Author
Privatecapitalalliance.com provides Angel Investors at a very affordable prizes. Small but increasing number of angel investors organize themselves into angel groups or angel networks to share research and pool their investment capital. Angel Investors Group invest their funds to a particular company, which supports financially.
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