How To Create Successful Angel Investments

June 22, 2012 by Pauline Felward  
Filed under Investment

Angel investing can be a very lucrative business activity for high net-worth individuals if they choose the right projects. Good judgment, a basic grounding in managing businesses and the ability to accurately measure the feasibility of a business plan are the basic characteristics of a successful angel investor. However, as with any other business investment, angel investors also need to exercise some caution. If you would like to explore angel investment opportunities, the first and most crucial thing to do is to arm yourself with information about this kind of investing and do thorough due diligence before making an investment.

Often people can be unsure of the difference between angel investors and venture capitalists. Knowing the difference gives you a better idea of what this kind of investing involves. Typically, the angel investor is one who provides funding in the range of $25,000 to $250,000 for a small business. Venture capitalists are interested in bigger businesses that need far more substantial financial backing – anywhere between $5 million to $1 billion. Although entrepreneurs who are starting up a company do approach VCs for smaller requirements, it can be very hard to get them to notice your deal. It is usually much easier for an entrepreneur to do a deal with an angel investor, as they tend to be more willing to look at very early-stage deals.

As an angel investor you may receive hundreds of proposals. But only a handful of these may actually turn out to be well planned with a well thought out business plan. Separating the sound business proposals from the unviable ones is one of the primary and most important steps to take for successful angel investing. Never hurry through this process or allow yourself to be tempted into investing in all the proposals which you receive. Always keep in mind that angel investing is a high-risk investment opportunity. Only proper research and analysis can insulate you from losing your money because you invested in an unviable business plan.

Setting accurate returns expectations for your investment is crucial for success in angel investing. The entrepreneurs who approach you for funding will include returns projections in their presentation, but it’s clearly up to you to determine whether these returns are indeed realistic and feasible given the parameters and assumptions. By undertaking a comprehensive analysis of the business plan, the management and the market conditions you can make a fairly accurate assessment. One important point to keep in mind is that business investors typically favor projects that can give them returns in the range of 10 to 20 times their investment. This sets off the immense risk that these business investors undertake by investing in startups.

A strategy followed by many successful business investorsis to invest in local businesses or those in close vicinity. This gives the investor a ‘ring side seat’ to watch over how his money is being used. In fact, many business investments come with the stipulation that the investor is included on the board of directors. Being on the board gives you some amount of control to ensure that the business, and in turn your investment, is successful.

Mike Lebus has written about business investment and angel investment for the past two years. He is a great source of information for angel business investors and entrepreneurs looking to create the most profitable business partnerships. One of his primary focuses is business investment tips for companies in the Central US.


Steer Clear Of Expensive Mistakes By Taking Investment Advice Sutton Coldfield

June 21, 2012 by Elizabeth Shaw  
Filed under Finance

It is a true but alarming fact that many investors fall into the trap of making bad investments – an error which can cost them not only in terms of the physical cost but also the loss of a lifestyle they have got used to. Investing poorly not only affects the individual but can have costly impacts on their whole family. Being aware of these mistakes is the first step in avoiding them and in this respect your investment advice Sutton Coldfield company can offer you welcome guidance.

First and foremost we’re only human and our wish to have reward is continually played out in our minds against the concern of uncertainty. Many investors make the mistake of being too greedy and risk losing everything. By taking investment advice Birmingham you’ll be able to minimise many of these risks because your investment advisor will help you to make disciplined, evidence-driven investments.

When it comes to financial trends, the past isn’t always a good guide to the future so what proved helpful for investors a year ago or even in the short term, may be a weak investment choice today. Investors also need to be aware that luck usually plays an element in short-term fund performance so reading too much into past trends is probably not advised. Past performance isn’t any guarantee of future returns. The value of an investment isn’t guaranteed on encashment and you might not get back the full amount invested

Taking investment advice Sutton Coldfield can help you to avoid the second biggest mistake made by investors – not understanding the principles behind investing. It is not necessary for every investor to understand this information but working with a financial advisor who does is recommended if you wish to make investments that meet your requirements.

Whilst good investing is not brain surgery it can call for a well thought through and evidence-based approach if the necessary outcomes are to be achieved. Taking investment advice Birmingham allows you to understand the principles of investing, hold your nerve when markets become unsteady and make appropriate investment decisions to grow your wealth.

If you are considering seeking investment advice Sutton Coldfield why not visit the Donald Asset Management website where you can take advantage of their services including investment advice Birmingham. Donald Asset Management Ltd is authorised and regulated by the Financial Services Authority.