THE ADVANTAGES OF RAISING MONEY THROUGH BUSINESS ANGELS
August 10, 2010 by
Filed under angel investors
Raising money and capital for your business, through business angels or otherwise, can be extremely daunting. You want to make sure that you make the right decisions and choose the best source, as where the money comes from can be just as important as the business idea itself. This is why raising money through business angels can offer so many advantages.
With business angels, you’re guaranteed to get personal interest in your business. Investing their own money makes them even more motivated to help you and your business succeed, and means that they’ll bring all of their experience and knowledge (as well as their money) to make sure that it does.
Knowledge, experience and contacts can be just as important as capital, as having the finance available is useless if you don’t know the best way to proceed with it. Using a business angel or private investor means that you’ll get the extra time and support that wouldn’t be available from more traditional routes such as banks.
Raising capital in this way is vastly different to securing a loan. Loans have to be repaid in a certain amount of time and charge interest at a specific rate, whereas funding through private investment isn’t subject to such rules. Repayment is based on the profitability of the business and is usually paid in dividends, and is much more of a long-term arrangement so investors can reap the best returns.
Business angels will often provide investment when normal avenues aren’t viable. You may not have any security to offer, or the business idea may seem too unusual or risky for a bank to offer funding. This is where angel investors come in. They’re far more likely to invest in a high-risk business, as it’s often these that have the potential for the most growth and subsequently the best returns. They’re also perfect if you need a “modest” investment or if your business is too young to be attractive to venture capitalists.
When raising money through business angels comes with all these advantages, you’d be wise to consider it!
One of the best websites in this regard is entrepreneurinvestornetwork.com.au, which aims at uniting angel investors looking for business investments in Australia with budding entrepreneurs in the country.Log on to the website today. You will not be disappointed.