Venture Capital in Technology Startups
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30 views;
last activity : 07 06 2010 20:18:09 +0000
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Are located everywhere, in practically all industries
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Flexible business agreements
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Can bring forth vast knowledge and experience to a new company
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Can provide the needed capital for a startup
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Involved in high risk investments
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Does not require high monthly fees
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Nowadays, angel investors can be found everywhere, not just in traditional financial centers and districts. They also invest in nearly all markets worldwide. The majority of them are involved in industry-specific investments, according to the level of their expertise. |
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True. Even ventures like restaurants, retail stores etc. can attract investor groups.The synergy comes from the promoter who needs to have good amount of experience in the respective business area.
Similar to venture capitalists, angel investors tend to focus on technology, but are also attracted to other types of industries as well. Regardless of the market sector that an angel is involved in, what attracts an angel investor to a specific venture is the potential for a company’s profitability and growth.
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I completely agree on the point of originality. Definitely at the outset I would not entertain any disturbance in the implementation of my business plan. As angel investors invest their own money, their business deals can often be negotiable. Because of this flexibility, they are more likely to be excellent sources of capital for early-stage businesses.
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Many angel investors were once entrepreneurs themselves and have founded several successful companies under their leadership; therefore, they will not only provide the needed capital that entrepreneurs need but they can also offer desired support, expertise, and contacts in making a business grow. |
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An angel’s insight and resources are of tremendous value for a company’s success, and an entrepreneur should always recognize the need for help, embracing the participation of their angel investor in daily business activities. This becomes important in case where tough and important decisions have to be taken at very crucial times.
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Capital is prerequisite for any start-up. When entrepreneurs have exhausted money from friends and family, personal savings, bank loans, and credit cards for their startups, they may seek angel investors to help them fill their needed equity gap. According to a survey, nearly 2/3 of funding for new enterprises is obtained from angel investors. Therefore, angel investor capital can provide a great source of funding for new businesses that have a high potential for growth. |
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Friends,I was involved in setting up investment groups for start ups and it has provided the needed capital.Creating your own investor groups can and will be a regular and long term source of funding.When the group is large and the risk is spread out and most of them are involved in their own vocation, you do not have the risk of take over etc. For ex. a group of 100 can raise Rs.1 crore if each of them contribute Rs.1 lakh each. The key issue to success is how reliable and open the entrepreneur is. If he is a true professional, this is a win win strategy. I have done it before.
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All investments made have elements of risk embedded in it. An angel investor’s
capital in a new business is considered to be a high-risk investment since the
new company has not yet established a solid track record of success. Since they
often provide the initial funding for a new company, it can be quite difficult
to determine if their invested enterprise will be successful in the long run.
Despite the fact that most new businesses fail in their initial years, angel
investors tend to be quite optimistic about their investment choices and often
request a large amount of returns to counterbalance the risk.
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Another benefit from raising angel capital which I have observed is that there are no outstanding payment rates such as the ones that bank loans and credit cards require. Many entrepreneurs enjoy this element of angel investors, concentrating their time and effort into taking their new business forward rather than worrying about high monthly payments and fees that traditional lenders enforce. |
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Thanks for the Insight Mr. Rao...very good post..... |
A very good slide on what to and what not to do in this situation.....Good one!!! |
Foreign portfolio investment has contributed to a very little extent in the country and the past record of the last quarter shows that they are wtihdrawing money from the market this indicates that there would not be more involvement of financial assets. |