Writing a Business Plan mentor Rhonda Abrams responds:
Angels truly are heavenly. Unlike venture capitalists who invest other people's money, angels are investing their own funds. That gives them more leeway on the kinds of things they can and will invest in. They also don't have to see such large returns as venture capitalists, so they can invest in smaller companies with smaller markets.
On the other hand, because it is their own money and there's less of it, angels are careful -- at least the smart angels. They want to see a business idea they understand and be confident the management can carry it off. And they need to know how soon the company will be able to make money or raise additional financing because the angels' own funds are limited.
What kinds of businesses get angels' halos shining?
Answer Copyright © 2001 Rhonda Abrams
For more information, see the inc.com Guide to Angel Investors.