A final--and important--reason to seek out angel investors is that they're frequently connected to additional capital, which you can access in several ways. First, if you can make good on the initial investment, then the same investor might come back with further financing when needed. Second, chances are angel investors have made other individuals who invested in previous ventures wealthy as well. These other investors are now within your reach. Third, if your company can grow to the size and scale where an IPO or a big institutional venture capital placement is viable, you can frequently access these investors through your angel investors, who may have worked with them in previous deals.
In the financing of companies, it would appear that economics rule the day. But in fact, economics often play second fiddle to more intangible contributions. In this way, angels can truly be a godsend.
Next month in "Raising Money," we'll tell you how to find an angel investor.
TV Plus Inc., (727) 895-7355, fax: (727) 895-7587