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Once you're sure your plan is fundable, it's all about matching the opportunity with the right investors. Find out everything you need to know about the different types of investors so you can decide which would work best with your endeavor. |
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The three types of investors are Friends
& Family, Angel Investors and Venture
Capitalists. |
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Before enlisting Friends & Family as
investors, make sure they understand
that new ventures are risky, there are
no guarantees and all of the funds
could be lost. |
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Angel Investors tend to be successful
entrepreneurs who like to offer
opportunities to other entrepreneurs. |
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Angel investors typically invest no
more than $50,000 |
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Venture Capitalists typically work on
behalf of groups of investors such as
pension funds and invest sums of
$1 million or more. |
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Venture Capitalists do major diligence
and may take 60-90 days to investigate
a funding opportunity. |
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Self-funding if a small investment is
needed & early profitability seems likely. |
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Angel Investor funding if less than
$500,000 is needed and there may
be a significant time before profitability. |
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Venture Capitalist funding if more than
$500,000 is needed, there is a 5-7 year
timeframe for profitability and at least
a 10x return on investment is expected. |
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Factors that improve the
fundability of a new venture
include the market size,
obstacles to competitors
entering the market, a
clear business model, a
good team and a well-
defined exit strategy. |
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It is important to determine
the type of funding to seek:
Self + Family & Friends,
Angel Investors or Venture
Capitalists. |
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