How Angelic are ‘Angel Investors?’

You have a strong business plan and the drive to see it flourish, but do you have a ballpark idea of the adequate financing your business idea might need and hence, the sufficient funds? This is where angel investors come to the rescue. They are people who come up and take the risk, invest in your business when no one does. At first glance, they might seem truly magnanimous, but how angelic are they truly? We’ve classified investors in three categories-

First, the ones who would invest $30-50 on every idea they like. These investors like to invest in trivial amounts.

Second, the sophisticated ones. They would throw any amount of money and would even help to build uplinks. They are well-established people and would create leverage to ensure their exit when the time comes.

Third, comes the investors you should always beware of. They will treat the business as if they own it, or bring their known ones to run it or merge with it. But when you are tempted by affluence and TechCrunch-fame distracts you from the truth, it's too late. You should always come clean to them about their limits on how much they should invest. Clear communication cuts down on conflict and confusion.

No matter how good your relationship is with your investor, you shouldn’t let anyone take ownership of your business out of your choice. If anything goes sideways, it would be you bearing the losses.

While the right investors will skyrocket your success rate, the wrong ones will put your business on the erroneous trajectory and waste your time.

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