Before entrepreneur approach angel investor for investment, he must take into the consideration the following advantages and disadvantages of angel investor.
Advantages are as follows
- Incase of angel financing, there is no need for collateral i.e personal assets.
- Knowledge, expertise, experience and contracts of angel investor can bring lot of benefits for the young enterprise.
- The business may also get lot of benefits as along with capital they provide monitoring or management skills.
- Firm is not liable to pay interest to angel investor Disadvantages are as follows: 1. It consumes a lot of time of entrepreneur to find a suitable business angel investor. 2. Angel investor is suitable only for a business that has limited budget. If it requires huge amount of capital this is source is not suitable. 3. Less structural support may be available from a business angel than that if an investing firm.