What is an angel investor agreement?
What is an angel investor agreement? Angel investor terms are used to define the relationship between an investor and the company receiving the investment. The terms of this type of agreement are established with a non-binding document called a term sheet.
What percentage does an angel investor get? The more money an angel investor gives your business, they more they’ll expect a bigger return on investment (ROI). The ROI expectation varies between angels and the specific investing opportunity. It’s not uncommon for an angel investor to expect a 30% return on their money.
What are typical angel investment terms? Angels will often invest in the company through a convertible note. They key terms negotiated are: Unsecured or secured on the assets of the company – this is almost always unsecured. Interest rate and payment – the interest is usually accrued and not paid currently.
Do you have to pay back angel investors? If the startup takes off, you’ll both reap the financial rewards. If your company falls flat, on the other hand, an angel investor won’t expect you to pay back the offered funds. Though you aren’t officially obligated to pay back your investor the capital they offer, there is a catch.