Nowadays entrepreneurship is everywhere, but often it does not achieve the desired success; mainly for lacking economic resources. Being starting projects, it is very difficult for banks to endorse them. Here, the role of the Angel Investors takes a lot of strength.
What are the Angel Investors?
The Angel Investor or Business Angel, is that accredited person; with money to invest. Angel Investors are looking for small or new companies to invest their own money. They also bring their experience, knowledge and contacts; Normally in exchange for being a business partner.
- They normally endorse a company by themselves, but it’s not a rule set in stone. This means they can participate at the same time and the same company with other Angels Investors. This way, the risk is minimized for all investors.
- To be an Angel Investor, you don’t just need money to invest in startups. You also have to have time to help grow those companies and be a part of it.
- They must be able to take risks and that means possible losses.
- They must participate to develop the necessary strategy for the company to grow. Therefore, they spend a lot of time and put in all their knowledge.
What economic requirements do these investors usually have?
Angel Investors must be entrenched investors in the sector. They must also have patrimony. The most common is their estate assets are at least one million euros. In addition, earn an annual income of 200k or 300k euros. This last figure is higher, if we take in consideration the annual earnings of a spouse; In case there’s one.
Angel Investors and the company
It’s important a good relationship is forged between the investor and the company. They are willing to be a support to strengthen and grow the new business initiatives.
It is important to mention, angel investors mainly support certain business sectors. These sectors are: technology, information and communication. The vast majority, related to innovation.
Andorra: a place for an Angel Investors
Andorra is a stable country economically and politically, this makes it very attractive for Angel Investors. In this case, for those looking for a small or expanding company in Andorra. That is, startup companies which have just started activities.
Andorra’s economy is very stable. Since 2012, thanks to a series of reforms, it has become uterly attractive for those interested in investing. Also, Andorra is a region with low taxes and this makes it a favorable region, fiscally.
Rate of profit of an Angel Investors
Of course, Angel Investors also want to success on their own goals, meaning, multiply the money they have invested. For that reason, they manage a rate that allows them to achieve it. So both the company and Angel Investors get their benefits.
The most common rate is between 20% and 25%. This percentage changes according to the company, the amount to be invested and other factors that they as investors will take into account. However, in the end, the rate of return is higher than what can be earned with common investments.
Advantages of having Business Angels
- They are professional and trained people.
- They dominate finance management well and know how to run a business from start to finish.
- They support entrepreneurs at all times. They get involved with the whole project.
- Your network of contacts is very good and wide.
- They support companies in their initial stages. They help them to be better.
- With their financial support and mentoring, companies grow much faster.
- They are responsible for doing a market study and looking for opportunities for the company to grow correctly.
- The company will have a valuable mentor and guide.
- He doesn’t mind taking risks.
