What Is A Business Plan For A Startup?
No investors can understand your business without the business plan statement. Because this document highlights the:
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Angel investor are the people who provide capital to potential startups in exchange for a piece of the enterprise, generally in the form of equity or royalties. They, generally, are experienced entrepreneurs or ultra-wealthy people who understand the realms of business.
Everyone who invests in a startup is not an angel investor. Not all investors are angels. An investor who puts his/her experience, value, and knowledge along with the money is known as a true Angel investor.
Anyone can invest capital in an idea. But if the investor is giving them money and leaving right after putting it, then he is not an angel. To be a real angel investor you have to guide the startup founder towards success, you have to take a close look at their strategies and reframe them if needed. Thus, being an angel is nowhere a cakewalk. It’s like teaching your younger self how to be successful all over again.
Generally, angel investors expect annual returns of 20-40%. This percentage can vary but not much. Besides, on an average basis, an angel expects to get the complete retrieval in 5-7 years. Yes, the risk is there because angels don’t invest in a business, their investment is in the idea. But due to their fabulous business experience and being an entrepreneur, they understand where and when to take risks.
Another point to note here is that be it Angel Investors India or Mumbai Angel Investors or Chennai Angel Investors, purpose and returns remain the same. They are universal and don’t vary much.
Both angel investors and Venture capitalists invest capital in the businesses. Of course, they hope for the best returns along with some calculated risks. But are they exactly similar? Nope.
Angel investors’ sole purpose is to support an idea or cause. Often they are families or friends who are ready to financially back their loved ones’ ideas. Or sometimes, the reason for angel funding is when there is a match of values and goals.
Whereas, venture capitalists invest to buy the startup in the coming time or to make a long-term high return.
Angel investors most likely fund the startups when they need the financial back extensively. That’s why the name is Angel. Because all they see is your idea and talent. Angels invest in startups even before they prove themselves.
On the other hand, venture capitalists fund the businesses after they set themselves on the ground firmly. They tend to bore fewer risks.
Like these 2, there are numerous other differences between Angel Investors and Venture Capitalists.