Typical Sources of Angel Investors

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Typical Sources of Angel Investors

Angle investors is a somewhat general term, and you can actually find these types of investors in a few different forms. Angel investments normally come from:

Family and friends: This is by far the most common source of funding for business startups that are interested in finding business start up money and is the only option for many. Given the high rate of failure with new businesses, it is also risky in terms of the possible impact on family/friend relationships if the business is not successful. It is important to be upfront about the risk of failure.

Wealthy individuals: Another good source is successful business people, doctors, lawyers, and others that have a high net worth and are willing to invest up to (typically) $500,000 in return for equity. Often this is done by word of mouth through business associates or associations such as the local Chamber of Commerce.

Groups: Angels are increasingly operating as part of an angel syndicate (a group of angel investors), which raises their potential investment level accordingly. Investors contribute funds to the syndicate and a professional syndicate management team chooses the investments.

Crowdfunding: A form of an online investing group, crowdfunding involves raising funding by having large groups of individuals invest amounts as small as $1,000.

Reference:https://www.thebalancesmb.com/angel-investor-2947066