Could there be ways to bring a company under an umbrella without a cash purchase? Or
Angel investors Those looking to finance their business can always look to an angel — angel investor, that is. Angel investors have been responsible for helping to start up several prominent companies, including Google, Yahoo and Costco. This alternative form of investing generally occurs in a company's early stages of growth, with investors expecting a 20 to 25 percent return on their investment.
"The principal advantage of an angel investor is generally that you have a friendlier atmosphere and a quicker decision-making circumstance for a smaller amount of dollars," said Mark DiSalvo, CEO of Sema4 Inc., a provider of private equity funds. "You are not going to invest the levels of time, experience and diligence that an institutional investor would require."
In addition, angel investors can help nascent businesses by serving as advisers.
"Angel investors are an aggregate of smaller high-net-worth individuals that are going to afford fitting in a more appropriate amount of money," said DiSalvo. "Very few institutional investors today will invest less than $2 million, whereas angels will invest from $100,000 to $2 million easily. You are more likely to get an investor who has strategic experience, so they can provide tactical benefit to the company they are investing in. That could mean that they have customers lined up for them. It can also mean they might have partnership opportunities for these businesses."
Despite those benefits, entrepreneurs must be sure to find the angel investor that's right for their business.
"In every stage, the investor and entrepreneur need to make sure they are the right partners for each other," DiSalvo said. "You have to fit the kind of investment with the need the entity has. That, however, is a difficult thing to discern."
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