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Angel Investors- An Entrepreneurial Partnership

Guest post by: Ellisa Brenneman

Article Overview: It's time for entrepreneurs to get real when raising capital and examine their relationship with potential angel investors. Discover what you need to do as a small business entrepreneur to prepare for bringing an angel investor on-board.

Angel Investors- An Entrepreneurial Partnership

Angel investors are your partners. Remember those words because they’re going to have to be put on a sign over your desk in case you have trouble. When entrepreneurs finally make that leap into securing an angel investor, the thought that has escaped them during the entire process is, “Now I have another partner to help with the decisions and the running of the business!” You didn’t think it would be that simple, did you?

What many entrepreneurs can seem to forget is that people aren’t going to just give you money to go off and start a business on your own. They’re going to want a say in what’s happening, the decisions that are being made, and most likely even the stationary choice that you made. Thinking that this wasn’t going to be a logical outcome to hitting up every angel investor in town is a tad bit short-sighted. Let’s examine why.

You’ve got a great business idea, you’re confident you could get funding once being put before an investor, and you’re ready to present. These are all the factors in your corner that you thought were important to get the preparation for opening the doors in place, but you forgot what to say when the investors nod, shake your hands, and go, “when do we get started?” Wait, what’s this “we” nonsense? The “we” is that these people are sinking a large sum of their money into the prospective success of your venture and, frankly, not realizing that giving them a say while they have however much percentage of a share of the business is going to look a little unprofessional. The first thing that’s going to have to happen is for you to try to figure out what that percentage will equal in your comfort level for sharing a commanding say in the business. Are you going to pick fights over things that you thought you were dead set on? Are you open to input at all for any directions the business should go? Do you respond to disapproval regarding your own plans? You have to make sure that these questions don’t make the hairs on your back stand up. If the thought of having to go head-to-head with some of these potential conflicts doesn’t sit well with you, you might want to rethink the concept of investment. You’re giving up a say in the business by asking people to put their money where your mouth is and that comes with strings that maybe you’re not ready for.

There is a bright side, though. By allowing these investors to take this percentage you’re getting the potential years of knowledge and experience that they have under their belt and the suggestions and guidance that can come along with that. Also, besides the money, the angel investors might even have suggestions for organizational solutions, marketing plans, and alternate revenue opportunities.

If you can break yourself into the idea of looking at investors as more than “free money without interest,” and a potential way to advance the business forward, then their suggestions and decisions won’t feel like they’re taking control of your dream.

Related Articles
  Funding Your Start Up
  How To Find An Angel Investor
  Who Are Angel Investors
  Attracting Angel Investors
  What's The Best Structure For A Pre-VC Investment?

Article Tags: angel investor, angel investors, business entrepreneur, partnership, relationship, small business



Related Forum Posts
toronto angel group - The Toronto Angel Group is a very hard group to get into. You have to have a very stable and viable business plan and they like to stick their fingers into your pie and they are usually looking to invest big bucks. Which means that they usually want to take control. If you look deeply into these groups you need to know someone or have a very good idea with potential clients backing you up. In my opinion, other sources of financing will give you better control of your business or learning to ask for the money upfront. One of the things I found is that new buisness owners are afraid to ask for the money upfront but every other business expects you to unless you have a proven credit history. Good luck with the Angel Investors
Re: SEEKING PRIVATE OR ANGEL INVESTOR - Do a Google search for Angel Investors. You will have many options to choose from. I think SCORES is one but I am not sure. Don't email them, pick up the phone and contact as many as you can. You need too have a rock solid business plan for these investors to even smile at the notion. Good luck with your journey.
Re: need a capitalist to hear me out - If you have solid business plan, there are thousands of Angel Investors and Venture Capitalists that will fund your project. Google "Venture Capitalist" and you will get tons of investors who are ready to fund your project
New Small Business Topic - Hello everyone, I'm on the lookout for new topics to add to my site. We just launched a Franchising section and are planning Human Resources section. Do you have any thoughts for a new section? Here's a list of what we currently have: Angel Investors Branding Bank Loans Business Coaching Business Plan Franchises (New) Insurance Legal Marketing Public Relations Sales Small Biz Loans Venture Capital
Angel Investors - From Wikipedia, the free encyclopedia the definition is: An angel investor or angel (known as a business angel in Europe), is an affluent individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity. A small but increasing number of angel investors are organizing themselves into angel networks or angel groups to share research and pool their investment capital. With that being said, Angel investors can come from a number of resources. You can try ACA (Angel Capital Association) in US / CA. Family & friends- Well, for me personally, I never do that type of business with family or friends for fear of a damaged relationship. I do not borrow from them, nor allow them to borrow from me. However, in my business I see it all the time. One place you can also try if not self employed, is with your current employer or even co-workers (of course having a good relationship with them is key). Also, get the information out to everyone and anyone about how you are seeking an angel investor, because you never know...just look at Evan's experience!


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