Business capital investors include either private individuals / entities or non-private firms / banks who take an equity position in your business venture. That equity can be in the form of stock through a company’s IPO or from a prearranged percentage of equity.
Typically, the private investors are successful entrepreneurs called angels that offer their expertise, experience and network of contacts. Angels usually consist of ex CEO’s and business owners with expertise in the field they are investing in. The non-private investors consist of SBIC’s (small business investment companies) and VC’s (venture capital) firms. Angel investors tend to be more lenient with the time frame for their return on investment and faster to fund, but sometimes require a higher rate of return than other funding types. They account for many times the amount of funding as all the Small Business Investment Companies and Venture Capitalists put together.
What’s the advantage?
- A major advantage to having private investors is that they usually take much less time to meet with and receive funds from; and the due diligence is usually less involved.
- A major advantage to having non-private investors is their greater financial resources and security in knowing they are fiduciarily more regulated. Especially in the case of an SBIC, which has to answer to the SBA who provides leverage and guarantees their investment pools.
We have categorized the investing criteria of more than 4000 funding sources. If you are looking for an investor of business capital then run a capital search in our funding source directory. You will be given a list of lenders whose criteria you match 100%.