Angel Investment
"When you hear the words "angel investing," it's pretty hard not to think of the bubble, when a lot of people scrambled to fund wild-eyed schemes only to lose money on the bad investments. The angels are back, but this time they may know what they're doing. "
"For entrepreneurs this is a very good thing. Angels come into a startup's funding life when the entrepreneur has exhausted the financial largesse of family and friends but the company is still too small or perhaps too unproven to capture a venture capitalist's attention. Angel investors, typically wealthy individuals who often have operating experience of their own, can bridge the funding gap during the seed and early stages with anywhere from $100,000 to $1 million. "
"Good angels can give a very early-stage company the financial boost it needs to get from an idea to a prototype, and then to a funding round of sufficient size that it will interest a traditional venture capital firm. But the ding against angels in the bubble years was that they were a bunch of opportunists who knew very little about the companies they invested in but always had something to say about how things should be run. Venture capitalists didn't like to get involved in an angel-funded company because the angels tended to slow down decision-making at critical points in a young company's growth trajectory. Angels need to get the membership together, vote on candidate companies, conduct due diligence, and pony up the cash. Because there are so many people involved, it can take some time. And even after the entrepreneur gets the money, there are still a lot of people who may want a say in decisions. "
"Angels have another problem: More venture capital firms are investing in the early stage these days, and they often put more than a few hundred thousand dollars into a deal. That rules out many of the deals angels live for. "
Read more here.
"For entrepreneurs this is a very good thing. Angels come into a startup's funding life when the entrepreneur has exhausted the financial largesse of family and friends but the company is still too small or perhaps too unproven to capture a venture capitalist's attention. Angel investors, typically wealthy individuals who often have operating experience of their own, can bridge the funding gap during the seed and early stages with anywhere from $100,000 to $1 million. "
"Good angels can give a very early-stage company the financial boost it needs to get from an idea to a prototype, and then to a funding round of sufficient size that it will interest a traditional venture capital firm. But the ding against angels in the bubble years was that they were a bunch of opportunists who knew very little about the companies they invested in but always had something to say about how things should be run. Venture capitalists didn't like to get involved in an angel-funded company because the angels tended to slow down decision-making at critical points in a young company's growth trajectory. Angels need to get the membership together, vote on candidate companies, conduct due diligence, and pony up the cash. Because there are so many people involved, it can take some time. And even after the entrepreneur gets the money, there are still a lot of people who may want a say in decisions. "
"Angels have another problem: More venture capital firms are investing in the early stage these days, and they often put more than a few hundred thousand dollars into a deal. That rules out many of the deals angels live for. "
Read more here.
 |
For more information, visit www.EvanCarmichael.com. |
0 Comments:
Post a Comment
<< Home