Venture Financing

  

Raising Funds for a Startup

 

Business Angels

 
   

Types of Business Angels

Adapted from
Where to Go When The Bank Says No: Alternatives for Financing Your Business
by Evanson, D.R.

 

 

 Venture Financing Gestation Stage Inception Stage Prototype Roll-Out Stage Growth Stage Expansion Stage Maturity Stage Founders: Bootstrapping Methods Business Angels Corporate Investing in External Ventures Venture Acquisitons IPO Venture Capital Firms Dealing with Banks Venture Management Venture Financing Revenue Model VC Investors Venture Funding Stages Type of Business Angels Venture Financing Chain funding startups

 
 

Corporate angels

These private investors use their severance or early-retirement pay from former senior management positions at large corporations to make entrepreneurial investments. Typically, they seek a new senior management job in the investment, want to be involved in one investment at a time.

  

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Entrepreneurial angels

The most active of the angel investors, they invest the largest amounts, often over $1M.

They tend to have been successful entrepreneurs themselves, now looking for ways to diversify their portfolio or expand their current business, rather than looking for a new job.

  

 
 

Enthusiast angels

Less professional than their entrepreneurial counterparts, these angels invest in firms more as a hobby now that they are in their later years. They tend to invest smaller amounts (from $20,000 to a few hundred thousand dollars) across a number of companies, but they do not actively participate in their investments.

  

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Micromanagement angels

These business angels prefer great control over their investments, often micromanaging them from a seat on the company board rather than through active participation.

They may invest in as many as four companies at a time, adding value as well as money to each.

  

 
 

Professional angels

As investors from backgrounds in professional careers (doctors, lawyers, accountants), these angels prefer to invest in firms that offer a product or service with which they have experience, frequently offering their sector expertise to the investee firm, although they're usually not too actively involved.

Generally investing in a number of firms simultaneously, they tend to invest from $30,000 to $300,000 each and prefer to co-invest with their peers (syndicates of business angels).

  

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