These angel investors are normally those who know the entrepreneur, or are a friend or family member of the person opening the business.
Angel investors, called angels for short, invest with new entrepreneurs or small businesses. These angel investors are normally those who know the entrepreneur, or are a friend or family member of the person opening the business. The amount that the angel gives is normally just a one-time deal, that helps the business grow and give it a kick-start. Angels also invest to help some companies move through the tough and difficult early stages.
Angels usually offer much more favorable terms as compared to other investors. This is mostly because they are helping the entrepreneur start the business and their investment is not used for largely growing the company. In short, they help businesses take the initial steps, which makes angel investors opposite to venture capitalists.
Other names of angels include business angels, seed investors, private investors, angel funders, or informal investors. In fact, there are some angels who offer capital in exchange for convertible notes or equity in the company. You can find angels on the angel networks or crowdfunding platforms to gather the capital needed to start your business.
If you are a person who wants to be an angel investor, you would have to meet the Securities Exchange Commission’s (SEC) standards for accredited investors. As per the standard, you need to have a minimum net worth of about $1 million with an annual income of $200,000.
If you still want more details on angel investors, Eqvista can help in explaining more about them. Be sure to checkout our cap table application, which can help you track all the shares of you and your investors.