GoFaxer Blog

Angel investors are wealthy people who provide the needed capital for a business start-up. They do this for convertible debt or ownership equity. They invest their own money, not the money of others. This is different than venture capitalists that run professionally managed funds.

Believe it or not, now is a good time to seek angel investors. Why? Because studies show that start-ups actually do better during a recession. They can find supplies for their small business at a lower cost. This includes, labor, land and other products needed to build a business infrastructure.

If you’re looking to convince angel investors that your business is worth their money, make sure to point out the tech savvy, money and time saving email fax service that you use. They’ll be impressed by your desire to spend their money where it counts—on developing sales and cash, not on spending it frivolously on paper and expensive fax machines.

Look for investors who have a lot of cash, allowing them the freedom to lose a little in your business venture. It’s usually recommended that investors spend no more than 10% of their investment wealth on a start-up, meaning that they’ve got to have a lot more money than you need.

You’ve got a great plan to run your new startup in the most cost-efficient manner. No need for an office. Everything will be online. You’ve got Internet fax. You’re ready to go.

Oh wait! Even though costs are low, you still will need to raise some money. As Carolyn Kepcher, the former start of Donald Trump’s “The Apprentice” points out, “This is always the hard part.”

In her recent article at msnbc.com she describes the seeking of money from what is typically called, “angel” investors, or in other words, friends and family. She says:

“When asking them for money, make sure of one thing: They can afford to lose whatever funds they decide to give you . . . If the company goes belly-up, you certainly do not want to be responsible for losses that might have an adverse effect on their lives.”

She then follows this up by suggesting that you invest your own money in your business. But she emphasizes that it shouldn’t be so much that you won’t have the necessities of your lifestyle. You don’t need to add the stress of paying your bills with the stress of starting a new business.

Regardless of how you raise your money, do it honestly and openly, with the understanding that like any investment, you may not get your money back. If everyone understands this, everyone will be more than pleased when you business is a huge success.