A Beginners Guide To Cash Angel Investors

Cash angel investors are so called because they provide cash for a business in its initial stages and they are kind of like angels who watch over you and try and make your business a success. Everyone knows that a business faces its most trying stages during its inception and towards the beginning. There seem to be hurdle upon hurdle, but a little bit of extra cash eliminates many of these hurdles. Thats where an angel investor comes in.

Cash angel investors dont merely provide you with much needed funds. They assist your company in many ways. They provide help in the fields of:

Communication
Information
Networking
Connections

And in many more ways. So, in short your angel investor is like your companys (and yours too!) guardian angel.

How to Deal With Them

A lot of times people wonder whether their business venture has to be large, in order for them to ask angel investors for cash. Well, most angel investors who are serious do know that startups are in fact, high risk ventures and look for high returns on their investments. Now most home based businesses dont have that kind of return. But that shouldnt discourage you.

There an angel investors who demand equity shares in the company instead of returns; those who do however, ask for a big share of the returns; something to the tune of 25% per year over a period of five to seven years. Yet other cash angel investors may specify their returns in terms of IRR, say, ten times their total investment in about ten years! If you ask me, for a small home based business, instead of approaching angel investors, you should get financial aid from friends and family. That works out better because in case your business doesnt do too well, you wont be in a soup.

Where To Find Them

If you do decide to go in for cash from angel investors and dont know whom to approach, let me tell you that angel investors can be contact right from the comfort of your home and all youll need for this is your computer! Yup, thats right, if you havent already guessed, Im talking about the internet. This is simply because most angel investor networks have a very strong presence online.

Try Googleing angel investors and youll find a whole host of them. Of course, it would be great if you could fine tune your search to include angel investors who especially invest in your field of business. Another thing to keep in mind is geographical proximity to angel investors. Most angel investors like to keep their investments close to their offices because it aids the communication process. Moreover, if any changes are required to be made, they can be made quite easily.

How much can you ask them for? Anywhere between ten thousand to one million dollars. If you are looking for greater amounts of funding, you could try a superangel or a Venture capital firm. But it is best to go with cash angel investors because the risk factor is considerably less.