This is a very short and simple explanation about the fundamentals of raising money…thought you might all enjoy!!

What is an angel investor and what are the common ways to raise money?

- Angel investors are often individual wealthy or well-off entrepreneurs who invest in promising start up companies and can work with inventors. What they will want to earn may vary greatly but most want an equity stake and a fairly high return on investment and I have seen anywhere from 20% to more than a 100%!!

- VC’s or venture capitalists are considered to be more formal investors and are often called institution investors and are usually not individuals but a formalized group that usually invest in companies that are past the beginning stage and already have some revenue and proof of concept. Inventors usually never work with them since most inventors look for money to fund their product’s development, patent work, and inventory when importing products from the factory.

- Friends and Family are the most common types of people that invest with inventors and they can be called angels as well. Most successful business people will tell you that they raised their first dollars with friends and family and/or a network of people they know through third parties, etc.

-The chances of raising money from anyone other than friends and family is small and without a professional business plan you reduce your odds even more so have one done! Investors are looking to make money and rightfully so and that means you must demonstrate that your business has high growth and profit potential for them to consider you.