Everything begins with a simple idea. This can be discovered by accident while working on something else or after years of being employed by someone else.
When banks are not that helpful with the loan, the entrepreneur may sometimes just give up on the idea. There are those who pray for a miracle and at times get an answer in the form of the venture capital angel investor.
What is a venture capital angel investor? This is a person who possibly heard the idea from someone else and would like to know more before deciding to help out in the business.
Should this happen, the entrepreneur show the business plan and even given a tour of the facility.
Even before the meeting has taken place, this person has probably done a credit and background check on the individual. The angel investor merely wants to see it for real if the concept itself is sound because there are those who have the notion that “ to see is to believe.”
This can only happen if the individual is able to address all the concerns that are asked by the angel investor. Making one mistake could cost everything so the person should be careful so it is best to be prepared before going in.
Before going to the meeting, it will be a good idea to also check on who is the angel investor. This could be just one person or a corporation so the person should proceed with caution before proceeding further.
Angel investors have a lot riding on the business when a deal has been made. This is because it is hard to regain money that has been lost so in order to safeguard the investment, this person will likely take an active role in the business.
This means both the entrepreneur and the angel will become strategic partners in order to make it work. In exchange for the money, the angel investor is entitled to a certain percentage of the company. Usually this is about 30% and this is something that can be agreed upon during the negotiation stage.
Are angel investors too good to be true? The answer is yes because it doesn’t happen everyday that someone is willing to lend a hand even when the entrepreneur has probably sent out a lot of letters to other people but did not get a favorable response. Perhaps the prayer was answered so the dream can become a reality.