In recent years, the number of accredited angel investors has risen sharply, providing many new financing opportunities for business owners.
What is an angel investment?
An angel investment comes from a specific affluent individual and grants a large amount of funds to an existing business or a start-up. Traditionally, these investments are not treated as loans, but rather are exchanged for ownership equity or stock holdings.
According to a report from RockthePostReport, angel investors delivered nearly $23 billion in 2012 in the US1.
How and why do businesses obtain angel investments?
Businesses typically solicit angel investments to grow beyond the startup phase and fund further development of products or services.
As for how businesses obtain angel investments, there are a number of ways of doing so: an angel investor may approach your business directly, or they may be presented to you via a third-party organization known as an angel group or angel networks, or your business may seek them out directly.
What is the difference between angel investing and OnDeck small business loans?
Angel investments are made primarily in exchange for company equity. The average angel investment is traditionally geared towards businesses that are on track to make at least $10 million in the next 3 – 7 years.
OnDeck offers true business loans and does not take any equity in exchange. We also lend to younger businesses than most angel investors – our minimum criteria includes being in business at least one year and having over $100,000 in annual revenue.
OnDeck is a Google Ventures-backed company with an A+ rating with the Better Business Bureau. The company offers small business loans nationwide to over 700 different industries. For more information about OnDeck small business loans, click here.