What Type of Investor Should You Seek?

For early stage funding there are several types of investors.

Angel, VC, Family office, or customer funding.

So which type is right for your deal?

This depends on your type of business, the return and timeframe for that return.

VCs want standard business models in high growth sectors with a 10X return in seven years.

Angels want 3 to 5 times their money in 3 to 5 years and have capital preservation in mind. They often look at businesses in non high-growth sectors.

Family offices are not time sensitive and can be very patient money but do expect outsized returns for that patience. They will also look at businesses in non high-growth sectors.

Potential customers are also candidates to fund your deal by pre paying or buying customized versions of your product. While this is not an investment, the cash earned works like funding to build your business.

In launching your fundraise, consider which investor fits your business type, return, and timeframe.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today!