You might be wondering what these angel investors are. Well literally, angel investors are agents of blessings. They are rich people who open their arms to help entrepreneurs who want to start their business. They are sometimes referred to as informal investors. Whoever they are, one thing is for sure- that they also exist in the business world.
One thing that we need to note is that funding from angel investors is neither a pure donation nor charity. If you were granted with a funding from angel investor, it doesn’t mean it’s for free. The amount you received from your angels are expected to be profited. However, unlike any other business loans, your angels will not pressure you to return it in a span of time. You can go on with your business and when time comes that you have established foundation for your business, you may return their investment with a corresponding amount of profit. You can return their investment through debt payment or ownership equity.
It must be important for a small business to ensure that their business has the potential to become successful because the investment of your angel investor is dependent on this factor. An investment from angel investors usually came from their own pocket, and they are actually risking their own funds for your business. To reciprocate the generosity of your angel, there must be an assurance that your business will become successful.
In this situation, the strong factor that matters between the angel investor and the entrepreneur is trust and faith. Usually, entrepreneurs seek an angel capital from their family and friends or for those people who really trust them and believe on their business concept. So if you are not that serious with your business, angel investment is surely not for you. You will not only loose your business but also the trust of the people whom you considered an angel.