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What are the drawbacks of working with Angel Investors?

Home » Entrepreneurship » Angel Investors » What are the drawbacks of working with Angel Investors?

First, the good news: Angel investors are relatively easy to come by. The bad news: Negotiation can be tricky because no two angels want the same terms and they typically do not invest in concert. Some business experts also feel that angels hold too narrow or rigid of a perspective on how things are to be done, that is, it’s their way or the highway.
Capital from angel investors can also be pricey. It could cost you no less than 10 percent of your company's equity, and, for start-ups and other early-stage companies, perhaps more than 50 percent. In addition, many angels charge management fees in the form of monthly retainers.



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