Some businesses benefit and can attract capital from investors. This is a risky form of capital as many investors expect a return on investment or partial ownership in the company. Below are a few different types of investors as described in the article Types of Business Investors
by Arnold Anderson of Demand Media.
are typically individuals with significant financial resources that invest in start-up businesses. An angel investor tends to follow his instincts and invest in businesses that may otherwise have a hard time attracting other kinds of investors. In some cases, an angel investor may only want a percentage of return on investment, and in other instances, may ask for partial ownership in the company and a say in management decisions. Angel investor arrangements typically range from hundreds of thousands up to deals worth a few million dollars.
are funding organizations that typically get involved in companies that have already shown a history of returns. Venture capitalist firms are rarely interested in risky start-up companies that may require a small amount of capital to get started. Venture capitalist organizations are typically interested in deals worth several millions of dollars, according to CNN Money. Venture capitalists normally ask to be placed in a position of partial ownership in the company in which they invest, and also expect to have a say in management decisions.
are often friends and family members with means to invest in a business. It is important to use an investment contract with friends and family members, just as you would with any other type of investor. The contract should outline the size of the investment, the rate of return and any ownership arrangements that may also be part of the agreement.