In today’s competitive business world, there are times when you run out of capital funds. The easiest and most convenient source of funding during such times, are the angel investors. This however doesn’t mean that you accept cash from any angel investor. Choosing the right kind of angel investor is also an important consideration.
While there are several kinds of angel investors, they can widely be categorized as –
Return on Investment (ROI) Angels
One thing about ROI angels is that, they invest only when the market is doing well. This is because; such investors are mainly concerned with the financial rewards they will be able to reap given the high-risk investments they make. For the ROI angels each investment is like another significant addition to their already diversified portfolio.
These angels are most often former business executives who have either been replaced from large corporations downsized or taken voluntary retirement. While these investors seem to be making investments only for the sake of profitability, they are actually looking for a paid & secured position in the company they are investing in.
High -Tech Angels
Though these investors are less in experience, the investments made by them in modern technology is quite significant. These investors value profitability as much as they value the exhilaration of introducing a novel technology in the market.
These are successful investors who have their own brilliant businesses, which provide them with a steady flow of income for making high-risk investments in start-up companies. While they make all efforts to help entrepreneurs launch their start-ups, they do not actively get involved in the operations of the company.
These are investors with extensive business experience, who have accumulated enormous amount of wealth over extended period of time. One important fact about these investors is that, they usually tend to make high-risk investments in spite of their losses, which adds-up to their diversified portfolio. Core Angels not just make capital investments but also useful knowledge investments.
Being professionally employed as lawyers, physicians, etc, these angels make investments into companies of their fields. At times, they may invest in several companies simultaneously. Professional angels are extremely valuable for initial capital investments.
These are considered to be the most serious types of investors. While most of them are born with a silver spoon, most others acquire their wealth through sheer hardwork. These investors usually seek a board position & tend to implicate the business strategies they have incorporated in their own companies into the companies they are investing in.
[This article has been contributed by www.smegetmoney.com – an initiative of SME Networks Pvt Ltd.]