Angel Investors

These are high net worth individuals , who invest in a start-up in return for a minority share in the business. They are usually serial entrepreneurs or heads of major multinational firms. They can also be a group of individuals who pool in funds to invest. The key networks include Mumbai Angels, Indian Angel Network, Hyderabad Angels, Pune Tech Angels, Business Angel Network of Kerala and East Angels.

How angel investing works

Angels typically come into the picture at a start-up's seed stage, when the business idea is just a concept. The business plan itself is very iffy. So what draws an angel's attention? Business ideas that have the potential to generate solid returns, as well as the person behind it, but they are basically in it for altruistic reasons.

Benefits

Angels are patient investors; they typically remain invested for 7-8 years. They review the progress regularly and are even willing to go back to the drawing board, if required . You can also expect quick access to funds. It can take anywhere between a day and three months to close a deal.

Drawbacks

The concept of angel funding is still at a nascent stage in India, so they are difficult to find. You need to boast the right contacts/professional network to bag such funding , besides having the right credentials .