VIEWS: 373 PAGES: 1 CATEGORY: Angel Investing and Venture Capital POSTED ON: 12/4/2008
This chart compares common misconceptions about angel funding, and shows their corresponding true fact.
Angel Investing Fiction and Fact Misconception All you need is one angel because they invest hundreds of thousands of dollars Angels are rich, so find someone with a net worth of $1million or more Everyone is getting angel funding -- why not you? Angel funding is for startups that are not yet bringing in revenue Reality $10,000 is the typical angel investment 32% of angels have a household income of $40,000 or less per year Only about 50,000 businesses get angel funding annually 64.5% of funded companies are either cashflow positive or "established companies" Experience counts: 89% of startups getting angel funding had a founder with at least one year of industry experience Angels spend an average of 41.9 minutes per week per company investment Angels make 70% - 85% of investments within 50 miles of home Individually, angels get 4.2% ownership on average; few entrepreneurs give up a controlling interest even with multiple angels investing in their company 37.5% receiving angel funding are retail or service businesses; 32% are part-time endeavors for the owner; and 9% to 18% are home based businesses All you need is a good idea and a business plan to get angel funding Angel investors will be in your hair all the time, driving you nuts Want to find an angel? Look nationally. You have to give up a controlling share in your company to angel investors You must have a high tech, high growth business to attract angels Data source: "Fool's Gold: The Truth Behind Angel Investing in America," written by Scott A. Shane, Oxford University Press, 2008 © 2008, chart by www.smallbiztrends.com
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