| When you talk about starting your own business on | | | | individuals who are interested in investing to grow |
| the internet, most people are referring to small, | | | | their own portfolio. Unlike angel investors, they are |
| internet based, home start up type deals. But maybe | | | | more interested in going concerns where the risk is |
| your ambitions lead you in another direction. Maybe | | | | less. They're looking to invest in established |
| you have a great product that you want to get | | | | businesses that need additional funding in order to |
| distributed world wide but you need the funding to | | | | expand and for which the future financial picture is |
| get off the ground. In that case, you need more | | | | almost certain to be profitable. Venture capitalists |
| capital than simple internet start-ups do. | | | | can also offer mentorship but are less concerned |
| One way to get the capital you need is to search | | | | with that than are angel investors. |
| out angel investors or venture capitalists who are | | | | Accordingly, if you have an idea for a business or |
| looking at funding businesses like yours. While the | | | | your business is very new, from days to perhaps a |
| two terms are often used interchangeably, and while | | | | year old, you'd be better off searching for angel |
| both are similar in many ways, there is a distinction | | | | investors rather than venture capitalists to get your |
| between the two. This distinction is important as it | | | | funding. As I indicated earlier, angel investors are |
| has a bearing on which group you should approach | | | | much more forgiving in terms of your ability to prove |
| for the funding of your business. | | | | that your business can make money. As long as your |
| Let's start with angel investors. An angel investor is | | | | idea is sound and you have a well-thought out |
| an individual or a group of individuals who want to | | | | business plan, an angel will be willing to fund you. |
| increase their investments by funding start-ups that | | | | If, on the other hand, you have an established |
| they believe are likely to be profitable. While angel | | | | business, that is a business that you've been |
| investors are concerned with investing wisely so that | | | | successfully running for two or more years but you |
| they can profit, they are also interested in helping | | | | need capital to grow your business or expand your |
| small, non-established businesses get off the ground. | | | | operation in other ways, then venture capitalists |
| To that end, they are often willing to provide | | | | would be a better fit for you. |
| mentorship and training along with the funds to help | | | | For either group you must approach them well |
| the fledgling new business owner on his or her way. | | | | prepared to discuss your business and how you plan |
| Now, let's move on to venture capitalists. I don't | | | | to succeed. Angel investors are more tolerant of |
| know if you've ever seen the show, Dragon's Den on | | | | initial losses as most startups are volatile. Angel |
| BBC America, but if you have, then you've got a | | | | investors and venture capitalists can be located by |
| pretty good idea about what venture capitalists are | | | | attending functions hosted by your local Chamber of |
| and what they're looking for. Like angel investors, | | | | Commerce. |
| venture capitalists may be individuals or groups of | | | | |