Angel Investors

Angel investors are high net worth indiviudauls who invest in new and up and coming companies. Angles investors are also elusive creatures.

Often they invest in companies in their own geographic area and will do various degrees of investigation about the company potential and owners before investing.

Some of them join 'Angel Investment' around the country that may meet weekly or monthly.

Unlike venture capitalists, angel investors less often pool money together and work with a proffessionally managed fund...But they do often organize themselves into 'angel networks' or 'angel groups' to share their findings and pool their investment capital.

Angel investments usually are for very high risk companies, and therefore, must offer the opportunity for extremely high returns.

Here are a few types of angel investors:

Retirement investor: This type comes from high up in the management of a large company and, with the knowledge and intution gained from working in businesses, look to get in on the ground floor of a new company. Often these retirement investors may be looking multiply their pension, or other company benefit funds.

Value-add investor. Startup investors who are generally stay out of the forefront but may be called upon numerous times.

"You need to do to convince a VC that you are interested in the value-add they can provide.  You need to carefully cultivate the perception that you are a hot commodity and that you can afford to take your time and be choosy, because that is the story that investors want to hear.  I didn't ask for this to be the game, I'm just learning this is how it is played. "
http://venturefounder.typepad.com

Professional angels: Profesional angels may be from high paying traditional occupations like lawyers or doctors. Frequently, they will invest in a compnay related to their fields of work. For example, a doctor who invests in a pharmaceutical company. Professional angels usually use a third party company to help them make their investment decisions and check out the company to be sure the investment is solid and copesetic. These investors are almost always totally in the background and don't get involved at all with the business beyond adding some capital.

Management barter/investment: Managers or executives from other companies that are downsizing may be interested in trading their services and expertise for a part of new company. This can be a good deal and be a good risk to take if you don't want to spend as much money on management.

The Entrepreneur-Investor - Successful entrepreneurs with a sharp eye for potential profits who want to reinvest and multiply their profits in a variety of companies. One of the more common species of angel investor.

VCs want a large market, but also an untapped market.

Socially Responsible Investors: These are people who invest in companies based on their values and beliefs. Sometimes, these people resemble 'benefactors' in their zeal to help companies whose products they believe in. Socially resposible or 'ethics based' investors want to promote and encourage products and companies that ally with their values and long term agendas.

The most obvious examples are environmental compies, alternative energy etc...

Bartering Investor: A bartering investor is someone willing to invest equipment, raw materials, or services into a company. Bartering is a powerful tool when starting up a business and can be used frequently if the situation is win-win.