Posts Tagged ‘start-up businesses’
Crowdfunding is rapidly increasing in popularity and garnering a lot of media attention as more and more experienced business angels are using it to connect with startups. We explore five reasons investors are adopting.
Got a brilliant idea but struggling to find the finance to get it going? In an age of overly cautious financial institutions and wary business investors, crowdfunding is emerging as a popular route to success. Here are five ways it can help your business.
The more money a start-up business asks for, the bigger the risk is to the investor – but if you can’t find the one business angel who’ll write that all-important cheque, why not go after several instead?
Many first-time entrepreneurs with great ideas jump straight to the phase where they’re looking for business angels and financial backers. Some expend great time and effort on their hunt.
Unfortunately this stage can’t come first, and here’s why.
Most of the time the partnerships which form between founders and angel investors are productive but, in a few cases, I have seen it turn very destructive.
Companies that should have realized success have been held back by investor partnerships that have severely limited their potential or, in some cases, doomed them to failure…
Investors in early stage and start-up businesses are known as angel investors. The tag ‘angel’ coming from their tendency to operate in the margins where venture capitalists, banks and other backers choose not to go.
They also help plug a major funding gap to get such ventures off the ground and they happen to be the kind of investors who are prepared to take a risk, rely on their instincts and invest large sums without too many hard questions asked.
At least this is the accepted view.
More than half of business angel investments fail, but why? How much of this can be put down to the innate vulnerability of start-up businesses?
Surely having an enthusiastic angel investor on board, eager to provide a timely injection of funding to ensure success should mean failure rates i.e. those leaving the business angel out of pocket come exit time should statistically be on the better side of half.
Yet this clearly isn’t the case.