photo credit: Mdrewe

Nowadays entrepreneurial ventures are constantly making headlines and featuring on television shows both in the US and abroad, which is pushing more and more people to make that change and start their own business. Some use their previous experience to provide a refined version of an existing business model that they believe can be improved, while some people lean towards the innovative side with a new idea or concept they’ve come up with.

While their ideas may cover a vast range of areas, there tends to be one thing that they all have in common: the entrepreneur is ready, but all he/she needs is capital (whether it is thousands or hundreds of thousands) in order to get their new idea off the ground. The next obstacle is being discovered in the first place, and this is where the concept of “angel investment” comes into play.

With little or no capital, let alone an established brand name, most entrepreneurs cannot get their company approved for loans, as they have no credit record or financial history. In this case, the most common sources of funding are individual investors, known as “business angels” or “angel investors”. They are high-net-worth individuals, who will invest seed capital in your company in exchange for equity in the company and a percentage of the company’s profit.

It is up to you the entrepreneur to decide whether he/she wants them to act as a silent partner or play an active role in the running of the company. Most will offer the investor an active role, as one of the additional advantages of obtaining funding via angel investors is that they bring their experience and know-how to the partnership as well as their money.

Many of the biggest start-ups in the online world (such as Amazon and Google) started up from angel investment, but even offline companies, such as the Body Shop and Starbucks were all started thanks to the help of angel investors.

Nowadays, thanks to technology, you don’t even have to live in one of the major cities in order to generate interest from potential investors. Communities such as the Midwest Investment Network provide a platform for entrepreneurs to find capital and for investors to find investment opportunities. This particular network operates in the Midwest US states (Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin) but is also part of a national and international network. Most of the communication is done online which gives investors the chance to invest in US or foreign businesses and allows entrepreneurs to raise funding not just in the US but internationally.

Mike Lebus works with entrepreneurs seeking investments, via the Angel Investment Network, which has since expanded into a worldwide network of websites that help angel investors connect to business entrepreneurs around the world.

photo credit: jaroslavd

It’s not new news any more, but China is on track to become a major economical superpower. Many people see it as an “upcoming” market, and often group it with the BRIC (Brazil, Russia, India, China) theme, but the growth in China is so fast, it actually poses a risk to the economy there.

Foreign companies and investors have jumped onboard in the last few years, even with the risks associated with the red tape that seems a bit more complex in China’s market than elsewhere. Foreign investment in China rose almost 50 percent for the first half of 2008 in comparison to the same period in 2007 (up to $52.4 billion), which was beyond all expectations and projections.

Over 14,000 businesses in China were financed by foreign investors in the first half of 2008, and this includes an increasing number of start-ups and small businesses. Many angel investors and entrepreneurs alike have been looking at making that step into the Chinese market. Factors such as the sheer size of the consumer market in China and the fact that Chinese residents’ disposable income is expected to rise make this a potentially lucrative investment opportunity.

The market in China is still in its early stages, and that is perhaps the most intimidating part. Unlike Hong Kong and Singapore, foreign investment has only been allowed in recent years. Only recently has China allowed foreign investors to form companies owned by foreign capital. These new changes have helped increase business flow within the country, and more tax friendly incentives for start-up businesses have been formed via Special Economic Zones and Development Zones, but there still is a long way to go.

With a strong economic surplus forming, China is not just becoming a place where foreign companies and investors look, but where a new wave of angel investors are emerging. By the end of 2007, more than 5,000 domestic Chinese enterprises had established direct investments in 172 countries and regions around the world. However, statistics show that Hong Kong is still the top foreign investing country in this part of the world. Critics do say that part of this is via Chinese companies looking for a tax break.

Foreign investment has been a factor in the markets of Hong Kong and Singapore for slightly longer. For instance, US companies are the top foreign investors in Singapore, followed by Japan, but Angel Investment is still relatively new in these locations.

Having angel investors in these markets is not a far fetched idea though. Several angel investor groups such as the Angel Investment Network have noticed this and have formed branches in China, Hong Kong and Singapore. The markets are still developing but show a lot of untapped potential and the Angel Investment Network’s portals should help bridge the gap between entrepreneur and investor.

Mike Lebus works with entrepreneurs seeking investments, via the Angel Investment Network websites of Angel Investors China, Hong Kong Investment Network and Singapore Angel Investment.