Janice Cheam, a Sauder graduate who came to tell us about her company (Energy Aware), during class n°19, used the help of “angel investors”. I had never heard this term before and I was curious about this concept.

Angel investors help start-ups that need cash to launch their business. Since it is very hard and costly to borrow from a bank, it can be a good option for new entrepreneurs. Angel investors can be family or friends of the founder of the company, but they can also be people who just believe the person or the idea has good chances to make a lot of money and expand the business.

Angel investors usually invest in small businesses from the sciences or technology sector. They also tend to invest in innovative companies, like Energy Aware, which created an environment-friendly device to monitor households’ electricity consumption. They ask for shares of the company in exchange for their investment. Angel investors take high risks, therefore they expect high returns. I think it is important that such investors help new business emerging, so that innovation is not stopped because of lack of financial resources.

Sources :

http://business.financialpost.com/2012/07/16/angel-investors-take-notice-of-canadian-startups/

http://www.investopedia.com/terms/a/angelinvestor.asp#axzz2CZ36oC00