Angel Investors and Deals

By Matthew Deutsch


Through the Low Doc Program, the SBA guarantees up to 85% of loans of $150,000 or less, as opposed to only 75% of loans greater than $150,000. Many texts have been written about angel investment. Angel investors want to work with businesses that are within one hour of their home. When you're putting together your pro forma financial model, you should communicate the valuation of the business on a year-to-year basis. Your board of directors will most likely include your angel investor. Some angel investors specialize in real estate transactions which may allow you to acquire owner-occupied properties.

As such, many entrepreneurs turn to angel investors in order to receive the money they needed were to launch their business operations. You should have a substantial amount of tangible assets to purchase with your investment capital. The eight year survival for an incorporated business is as high as 50%. If you qualify for a bank loan, then using angel investor may not be in your best interest. Before you send any materials to a third-party, your attorney should review each and every document that you produce. In limited instances, these private investors will syndicate their investment with other funding sources if the investment is large but not large enough for a venture capital firm.

Angel investors are smart people. Distribution strategy involves where will you be operating your business out of and or by what means will you be reaching your customers. Entrepreneurs need a network of contacts, including customers, suppliers, investors, accountants, and lawyers. An attorney should be closely to inform you of the specific laws that are related to raising capital from a private source.

Most angel investors have an investment time frame approximately three years to seven years. One of the best aspects to working with these types of firms is that they can provide you with greater access to capital as your business expands.

Dividends should not be provided to your private investor unless you need to. You need to have a properly developed exit strategy in regards to your business. We strongly recommend that you review all of regulations on the SEC website as it pertains to raising capital from private sources. SBA loans, unlike equity, requires monthly repayments of principal. The details of how you will accomplish the goals of your business are described in your business plan. Your business must fit in and have its own place within the current market.




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