Archangels

What is an Angel Investor?

An Angel Investor as defined by the Kahn Kleinman Redbook is an individual investor, generally with high net worth, providing venture capital to an early stage business. Angel investors often invest in industries or businesses that they are familiar with. An angel investor may not be as sophisticated as an institutional investor, and often may not involve themselves as much in the oversight and management of a company’s operations as a traditional institutional investor.

What is an Angel Network?

An Angel Network is a group of accredited investors who combine funds to provide the capital needed for a particular entrepreneurial venture. Individual investments can be as little as $10,000.

Why should I be an Angel Investor?

Any investment is typically made with the expectation to make a profit on the initial contribution. However, Angel Investors have additional motivating factors:

  • Want to share their experience and knowledge
  • Excitement of participating in a start-up venture
  • Desire to mentor a new business owner
  • Interested in staying current within the industry
  • Enthusiasm for the business idea

What is the difference between an Angel Investment and Venture Capital?

Angel Investment Venture Capital Fund
Type of Business

New start-up and early-stage ventures needing beginning capital to get their business off the ground or to grow.

Established businesses looking for serious capital to take their business national or international

Amount of Investment

$250,000 – $2,000,000

Over $1,000,000

Involvement in Business

Terms and level of involvement vary from mentoring to having an active seat on the Board. Essentially they’ll play a less active role than a Venture Capitalist.

They will expect a percentage of the company in exchange for financing. They will have specific expectations and ideas for how the money should be used and the direction of the organization in which they are investing.

Where the money comes from

Private funds

VC Fund raises money from wealthy individuals and other funds.

Risk Level

Conservative

Higher Risk

Motivation

In many cases, the Angel Investor is investing for reasons other than their expected rate of return. They may be a little more lenient with respect to amount and frequency of returns.

They are strictly motivated by the expected return and therefore will be forceful in their expectations.

How do I become an Accredited Investor?

An Accredited Investor as defined by the Securities and Exchange Commission (SEC) in Regulation D of the Securities Act has knowledge and experience in financial and business matters; and, that is capable of evaluating the merits and risks of private equity investments. Visit www.sec.gov for complete information on becoming an accredited investor.

I am an investor – how do I get started with ARCHAngels?

We are always looking for new investors interested in connecting with entrepreneurs in the greater Akron region. To find out about how you can participate, please contact Barry Rosenbaum at 330-972-8821 or Gordon Schorr at 220-972-8306.

What type of companies present their plan to potential investors?

For a listing of some of the companies that have presented at the ARCHAngels quarterly events, click here.

What type of due diligence is done by ARCHAngels?

Click here to see the ARCHAngel process.

Learn more about the Resources for the Entrepreneurial Path.