Understanding the Basics of an Angel Investor angel investors are individuals or organizations that invest their own money in startups or early stage companies. The primary purpose behind an angel investor is to provide financial support to businesses in exchange for a piece of their equity. Unlike venture capital firms, angel investors are usually individuals who are invested financially, but also mentally in the success of the entrepreneur or founders that they are investing in. Angel Investor Benefits When an angel investor decides to become a part of a startup or early-stage company, the entrepreneur or founders get much more than just the money. They also often gain access to an angel investor’s network of influential business contacts, which can be invaluable for tapping into potential new markets or customer segments. In addition, an angel investor’s experience and knowledge can help founders navigate some of the key hurdles to success and growth that come with starting and growing a business. Criteria Angel Investors Look for When considering companies for investment, angel investors have certain criteria they look for, such as a strong business plan, experienced management team, valid market opportunity, and a clear exit strategy. Angel investors are also looking for companies that have potential for a significant return on their investment. With this in mind, they often look for companies that have the potential for double or triple digit returns in five to ten years. Using an Angel Investor’s Money Wisely It’s important for entrepreneurs or founders to understand that while angel investors are there to help founders get the funding they need to get their businesses up and running, the angel investor is also looking to make money in return for their investment. This means that any funds that are received must be used in a way that is both beneficial to the company, and produces a return for the angel investor. Finding an Angel Investor Finding an angel investor can be challenging, as there are new ones popping up all the time. However, there are ways to locate them, such as through online listings, network events, and even referrals from friends and family. It’s also important to understand the differences between different types of angel investors, such as institutional angel investors or corporate angel investors. Additionally, entrepreneurs should research angel investors to make sure they fit the company’s needs.