A Business Plan for Angel Investors

A well written business plan will give you a much greater advantage when you are looking to raise capital from an outside source or from an angel investor. We’re going to continue to discuss accredited investors, business planning, and working with private investors through our series of articles relating to finding angel investment. It is extremely important that you have a well-developed business plan when presenting the venture to a third party so that you can clearly show that you are good risk as it pertains to small business investment. If you own a high gross margin income type of business and will be in your best interest to work with a small business investment company as you will receive much better terms in regards to this investment. It should be noted that capital always comes at a cost.

One of the best alternatives to selling equity in your business is to work with a small business investment company or SBIC. This is primarily due to the fact that SBICs have the ability to raise debt capital on your behalf through a number of different lending channels. Private investors have substantial business and entrepreneurial experience that can assist you in further expanding your business. If you are working with a private funding source then lawyer should always be involved with this process.

Large investments may be more appropriate for a venture capital firm especially if you have developed new technology or a computer program. It is important to never give up too much equity in your business to a third party. There are number of differences between working with angel investors versus working with venture capital firms, and we will continue to hone in on this matter through several additional articles.

More and more women are becoming angel investors, and they are primarily interested in providing capital to businesses that are owned by women. We will continue to discuss the benefits of working with female angel investors and minority investors as we continue to discuss private investment into small businesses.

As we have discussed many times before, it is imperative that you seek the advice of a lawyer that is well versed in securities law as well as a certified public accountant that can assist you with determining whether or not you should seek outside investment for your business. Only these professionals can provide you with opinions that will provide you with financing alternatives and insight as it relates to this matter.