Obtaining financing for your idea can be one of the toughest tasks you encounter during any business start-up phase. Venture Capitalists typically will not provide you with funding unless you have a working prototype to demonstrate your idea, or unless you can reference a credible track record of experience. But it’s often difficult to build a prototype or establish that track record without having the funding to get started. In most cases, you can connect with an angel investor for help.

The Profile

The typical profile of an angel investor usually encompasses the following:

•           Individuals with business background

•           Tends to offer hands-on advice and consulting

•           Invest within a close geographic area

•           Investments are generally capped at $10,000

Locating an Angel Investor

Often, Angel Investors will locate you. Again, most are business leaders in their community and have a really good idea of the up and coming. Because they are often friends and associates, it may be as easy as presenting your business plan to them.

The Expectations

Though an angel investor will provide you with much-needed resources, remember that he or she does own part of your company, and thus will maintain some control of your product. As part of the investment, an angel investor expects to earn a profit from the investment in your company. Typically, an angel investor will expect a return of between three and ten times the original investment within five to seven years, but Tony Banks’ Ministry approach is slightly different. Our investments are on short-term basis, generally less than twelve months. The return will vary depending on factors such as risk level, industry, exposure, etc., so you will need to provide a plan to demonstrate your earnings strategy to the investor.

Looking Ahead

We hope this information has been of some help in understanding angel funding. If you need assistance writing your business plan or becoming incorporated, contact Tony Banks Ministry via email: tbanksministry@aol.com or 706.575.6090 to schedule an office visit.