Angel Investing and Entrepreneurship

Overview: The need for venture capitalists to fund the venture is always felt. Like many entrepreneurs, one may have overlooked the greatest source of external financing of high-risk, start-up ventures—angel investors. Angel investors are usually wealthy individuals, often entrepreneurs, themselves, or business people, who make high-risk investments in small companies. Some angel-backed companies go on to receive venture funding, becoming publicly traded companies and industry leaders. In this way, angel investing strongly complements the role of venture capital. Without angel investment, these companies might never have grown sufficiently to attract the interest of venture capital firms. Angel investors are instrumental in funding early-stage, fast-growth, entrepreneurial firms, which ultimately are responsible for nearly all job creation. Venture capitalists get all the press, but the vast majority of entrepreneurial firms are actually funded by business angels, especially those firms in their earliest stages. The angel liking and having a good impression of the entrepreneur played an important role. Similarly, the entrepreneur should choose an investor he or she feels comfortable working with. The importance of angel investing will increase in the future partially due to the large number of people who have achieved wealth via entrepreneurship and the growth in the stock market.

(Is this item miscategorized? Does it need more tags? Let us know.)

Format: HTML | Date: Jan 2003 | Pages: 1