One of the greatest advantages of this type of financing is, as already mentioned in the previous paragraphs, the lower risk for the entrepreneur.
Usually, there is no debt the owner would owe the investor in the event of a business failure. In addition to capital itself, business angels also offer support in the form of invaluable advice that reflects their experience in the business sector. This experience is also associated with knowledge in the industry, which can bring many benefits to the company, accelerating its development and increasing its reach.
However, there are two sides to each coin – the benefits may come with some limitations.
The entrepreneur must take into account that funding by a business angel can mean a loss of the total autonomy that he had previously had as the sole owner. Business angels receive shares in the company for capital investment. Sometimes their idea of the project may differ from that of the entrepreneur. In such cases, it happens that the originator has to give up part of his vision in order to achieve consensus with other stakeholders in the project. Additionally, the high rate of return expected by investors limits the future income of the enterprise owner. In the long run, however, this may turn out to be secondary to the actual realization of your business idea.
This article was intended to provide the most relevant information on this type of financing. In the end, it is you as an entrepreneur that has to ask yourself if the potential benefits outweigh the disadvantages. If you decide that partnering with business angels is something for you, consider seeking help on our platform. It is the perfect place to showcase your idea and get investors to help you implement your project and make your dreams come true.