While three-quarters of successful small businesses use their founder's money for start-up so-called angel investors may be an option.
Angel investors are people who know you, like you, or love you enough to provide money with few or no strings attached (your most likely source), and people with enough money to invest in businesses because they believe they can beat the return they would see from more traditional investments.
Angels are probably the largest source of risk capital in the small business economy, but it's hard to tell, really, because their investments generally are kept kept private. Some estimates suggest $30 to $50 Billion are invest annually in such deals--about 10 times the formal venture capital inverstment.
The typical private investor is forty-something, earns around a hundred grand a year, a is worth about a million bucks. They typical invest close to home and only about about $40K per deal and seldom more than a few hundred thousand dollars. Some, however, invest in groups with other angels, and they’ll usually bring them the party to share the risk.
Only one problem. Angels don’t wear signs proclaiming that they’re investors. But angels can be found among your family, friends, acquaintances, professionals, customers, suppliers, and even competitors. Ask your accountant or lawyer, even your barber, if they know anyone who invests in small companies and you may get a lead.
But be careful. Even an innocent ad in a newspaper promoting your need for an investor or partner can get you into big trouble with the securities sheriff! Naivete in such matters could cost you your company and worse later!
Home Based Business--Start Up Money From Angels - To learn more about this author, visit Kate Lister's Website.
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