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Advantages Of Business Angel Funding

Updated: Jun 29




Starting a business from scratch is invariably hard and rightly so. One must be completely dedicated and invested in the start-up enterprise to find success. A start-up requires funds and capital to run. Many start-up owners are unable to fund their businesses from the get-go. This is where Angel Investors for start-ups can be of great help.


Angel Investment in Start-ups can depend on a plethora of things. Angel investors in Mumbai are people who have an abundance of spare cash available and want to make money out of it. They do this by investing in start-ups they think have potential. By giving you their money, you forgo some amount of equity from your company. Angel investors for start-ups typically expect a return of around 30-60%. Attracting the right angel investors for start-ups is sometimes hard. However, I’m here to explain the importance of angel investment in start-ups.



Six reasons why angel investors are beneficial.



1. Low Risk


An important aspect of angel investors in Mumbai is that angel investing is relatively low risk compared to debt financing. Loans have to be paid back even if the business fails, however, this is not the case for angel investors. This makes angel investing relatively low risk.




2. Commitment


Unlike with loans, angel investors India are as committed to the business and want the business to succeed. The success of the business will guarantee its return on investment. Apart from the financial gain, they may acquire, an angel investor in Mumbai also looking for personal opportunities in the company itself. So the dedication they will show to the company is not ill-perceived.




3. More Discipline in the Company


Since the start-up is being funded by an outside source it provides an extra jolt of motivation for the employees and entrepreneurs to work ten-fold to make sure the company succeeds.




4. Mentorship


Most angel investors for start-ups have been in the investing business for a long time and as a result, have a lot of experience and knowledge they can impart. Their business experience is by far and large very good. Start-up employees and entrepreneurs can learn a great deal from these investors about a business as well as what can help it grow etc.





5. Contacts


Any established angel investor in Mumbai will have a huge base of contacts. These contacts can turn into potential customers or employees. Their contacts with regards to industry professional will also be a large one and such the company will be exposed to accountants, lawyers, investment bankers etc.




6. Reinvest


Most angel investors in Mumbai who invest in start-ups are known to reinvest their returns back into the company. This is of huge benefit to the company. They are also known to help the start-up with new ideas on promoting and expanding the business. All in all, it is very profitable to have an angel investor on board.






About Devansh Lakhani


Director of Lakhani Financial Services and a Chartered Accountant helps in start-ups funding India from his network of investors. He guides and advises start-ups to scale up by providing efficient sales, marketing, team building, and business management strategies. Being a business plan consultant he has executed fundraising by block deals on the stock exchange and conducted IPOs and right issues on the SME platform to the tune of over Rs. 50 Crore. He is currently working with start-ups from various sectors to help them channelize their business models and investments.

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