Do you need finance for your startup ? Don’t worry angel investors are ready to help you.
Angel investor is an affluent individual who provides capital for a business startup suppose you are planning to start for introducing a business startup so as an entrepreneur or as a young entrepreneur and you want to start the startup but you do not have the finance to start your business.
So Angel investor is a person who will finance your startup. Usually, Angel investor is affluent individual who will provide capital for a business startup and exchange of capital provided by the Angel investor you will have to provide convertible debt or ownership equity now.
What’s in it for me?
- What is the issue associated with angel investor?
- Five types of Angel investors
What is the issue associated with angel investor?
The major issue was regarding money laundering and how does Angel investment lead to money launder. There are many instances where individuals using unlisted companies to use Angel investment.
So what happened that black money would be received at Angel investment and this will be easily converted into white money in the name of Angel investment.
Because of this issue in the year 2012, in the union budget that year a taxation provision on Angel investment was introduced and this was known as anti-money laundering provision and this was to eliminate any chance of money laundering to the angel investment.
Now let’s understand what is the concern regarding this.
The first one is regarding the accounting income we have seen that under the discounting cash flow (DCF) method it is based on future cash flow and the accounting income arises only when the business uses its capital to create a product that leads to profile.
So how was income generated in the business? First of all, the business should have a capital and this capital has to be deployed effectively to create a product or production or services. After that, the sale of the product or service will yield a profit to the business.
The second concern is regarding the valuation of book value. The valuation of a business is an issue that is left to the venture and the investor and this is another cause of concern.
The third concern is taxation on Angel investment which promoted startup in a cause of concern because if the countries taxing domestic investors on the home ground startup this will have a negative impact on the investment rate on the eco-system.
Also read – Private Equity fund
Five types of Angel investors
Angel investor can be all over the map. They can be anything from super professional to complete amateur. In this blog, I tell you five types of Angels so you know where to look for an amazing Angel.
Super angels are professional Angel investor they can have anything from 10 to 200 investment. If they recently started on the way 200 of different Investments.
|Super angels are professional investors; you usually know what they are doing so getting investment from a super Angel can be a stamp of approval you know it shows that you know somebody invested in you that knows what they are doing.||They do lots of investment this also means that their time is spread out between all those investments. So they want to have a lot of time for you. They have a lot of investment and not that much time.|
|Usually, super angels are also very well connected specifically connected to the venture capitalist community so venture capital wants to be connected to the super angels as they can give them a really good deal.|
Friends and family
Friends and family invest because they trust you, like you, and maybe love you. Sometimes they are called friends, family, and fools and this is because they are not a professional investor and maybe they don’t really know what they are doing, they invest in you as a person, as a member of the family always remember that investing in a Startup is incredibly risky.
There is a very good chance of losing that money so make sure your friends and family don’t invest more than they can really offer.
|They are one of the few venues then if you are a first-time founder this is one of the few ways you can actually get some funding.||They are one of the few venues then if you are a first-time founder this is one of the few ways you can actually get some funding.|
|Sometimes they think they can help you and they interfere with the business without really contributing|
Fellow founder angels
There are quite a lot of founders out the successful people that have made a lot of money some of these people actually most of them want to give back and hopefully make some money on top of that some of them go all the way and really make a lot of investment and become super angel too.
|They are built of business before so they can help you build that business which can be really helpful.||Some of these guys don’t really want to be investors they just do it to give back to the community. So they don’t really want to get involved|
The Angel who’s worked in industry for a long time these opportunities in that industry both will invest in startups that will solve the problem in that industry.
|They tend to be really well connected in the industry. So they worked in the industry for a long time, this can be very useful for a Startup and give you quite a lot of shortcut.||They have domain knowledge they have seen how things are done for a long time so they could be set in their way so sometimes they will object to the way startup wants to distract an industry. So this experience growth goes both ways.|
|They also have domain knowledge again they work there for a long time and you know maybe they can avoid your startup for making a few mistakes.|
Bored and wealthy angel investor
There are people out there that are really wealthy and bored. This could be doctors, dentists, and lawyers. They have a job that they are kind of bored with or maybe they don’t have a job and are bored but they need some stories.
They can tell that their Cocktail party needs some excitement and they want to live a little of their life through the interesting startup that you are building.
|These people lot of money and they are willing to invest so they can bankroll you for some time.||They can be a little bit high maintenance again they want some excitement so they can’t be high maintenance just a lot of talking to them and so on and without actually contributing to the business.|
Top Angel investor in india
- Abhishek Rungta
- Ajay Lavakare
- Ajeet Khurana
- Aloke Bajpai
- Chandigarh Angels Network
Therefore angel investor is one of the important source of capital in business not for the finance they will guide the young startup in all their aspect ranging from guiding the growth financially and making their step strong into the financial market This is the whole essential procedure needed steps to get funding by angel investors that can be done alone without any help easily and will be less time taken process.
An Angel investor is a person who will finance your startup. Usually, Angel investor is affluent individual who will provide capital for a business startup and exchange of capital provided by the Angel investor you will have to provide convertible debt or ownership equity now.
you can find angel investor anywhere
you just need a network- network-network
Friends and family
Fellow founder angels
Bored and wealthy angel investor
No Idea without execution is useless
Hi I’m Gurpreet singh, Engineer turned Digital Marketer | Entrepreneur |Mechanical Engineer|Visit gurpreetchawla.in