For a new company, the difficult task of its business process is raising the seed money. It is the initial capital of the new venture that helps all the business processes get off the ground. In fact this seed funding helps you to take the business to a position where you can raise more money. In this stage, the new venture started to borrowing money from friends and relatives and other loved ones. There are number of ways to raise seed money and seed angel funding is one of the best methods for that.
Approach an angel investor for seed angel funding. You can raise money for angel seed funding from an angel investor against certain percentage of control of the business of the new company. Even though you are forced to sacrifice some control, you can raise the required seed angel funding this way. In fact, it is difficult to raise angel seed funding from the angel investors because most of them interested in extensive technology-based businesses. They prefer to invest in the second stage of business rather than seed angel funding after it begun to show profitability.
Most of the time, seed angel funding are used for the initial operational expenses such as product development and market research. Usually seed capital is not a big amount and the general sources of seed angel funding is founders or owners of the business or close friends or relatives of them. Many companies seek out the help of angels to raise seed angel funding to meet the preliminary expenses and most of them started up with a very less angel seed funding as small as $10,000.
It is good to keep certain things in mind before you seek investors for the seed angel funding. During the circumstances of seed angel funding, you are required to share the control of your business with the investors who helped you with angel seed funding. Besides, you are forced to share business information of confidential nature with the potential investors. Angel investors mostly looking for an earning of at least 30% on the angel seed funding provided by them. So, it is good to ensure before going behind these investors that your company can yield minimum that much of return.
If you are taking the right steps, it is relatively an easy thing to find seed angel funding for your business. There are many people ready to invest for new business ventures as an angel seed funding in order to gain profits. You will find angel funding mostly from your local networks. You must remember before you are seeking for seed angel funding that there are many people throughout the world with money looking for unique and rewarding business opportunities and ideas than people who are searching for private investors for raising their seed angel funding.
It is a regular business practice throughout the world raising seed angel funding from private investor, may be in different names based on the country. You will find many angel investors in Europe and USA who are ready to invest for seed angel funding to a new business against a certain percentage of ownership equity. Angle investors are mostly business executives or rich entrepreneurs who are interested to invest in companies that show great growth prospects. It is necessary to raise seed angel funds that help the venture in its initial stages and help the company to work its way to a position where it can achieve self-sustaining.
Besides offering seed angel funding, an experienced investor can provide his skills and valuable knowledge to the company on how to run the business during the initial stages of its development. These angel investors can also help the business enterprises with their great sources of contacts. That will help the company to find more investors for seed angel funding and offer the opportunity to make dealings with others in the industry.
The resources and insight of the angel investors are always beneficial to the company along with the seed angel funding provided by them. All of us know that financing a company or business venture is not an easy job and it needs substantial efforts to procure seed angel funding. In fact, seed funding and angel funding are playing very significant roles at the preliminary development stages of the company. Seed angel funding can come from investors which are known in different names like simply angels, business angels or informal investors.
You will find angel networks or angel groups which are the formation of angel investors and they research together and invest in various business ventures seeking seed angel funding as a group. Normally seed angel funding comes from same sources like the owners or founders of the business. The venture capitalists are obviously different from angel investors. Unlike seed angel funding, they are mange pooled funds basically in a managed system.
Several studies have revealed that companies that are rely on seed angel funding have better growth prospectus than companies seeking other financing methods or sources for funds. Most of the time angel investors are using their own capital as seed angel funding in startup companies. These days, there is an increasing tendency of group formation of angel investors and their investment in companies which are trying to raise seed angel funding It is worth for an early-stage enterprises to raise seed angel funding because these investors are providing their skills and much desirable experience to the business besides money.
You can see pros and cons for angel investing and raising of angel seed funding even though the benefits outweigh the shortcomings. In reality, high risks are there in investing in such companies with no proven record of success. However, angel investors and the raised seed angel funding from them certainly add value to the business venture. Besides, it is more suitable to take seed angel funding from angel investors than their counterparts of venture capitalists. We can undoubtedly say that seed angel funding is very important to raise capital to meet the preliminary expenses of a startup company.