Small business owners in Illinois and elsewhere in the United States are typically on the lookout for capital. Working with an angel investor may be an ideal way to get the money they need without having to turn to venture capitalists. This type of investor may be a friend or family member who has sufficient money to back a new venture. In some cases, angels work in groups as opposed to on an individual basis.

The typical angel investor is between the ages of 40 and 60, and this person likely has experience as an entrepreneur or experience running a company in general. The SEC says that an angel investor is someone who has a net worth of at least $1 million and makes at least $200,000 a year. Those who are married must make $300,000 per year. The rule is put in place to ensure that individuals don’t put money that they can’t afford to lose into a potentially risky venture.

Angel investors generally expect that an investment deal will last for five years. They also understand that they may not see a return on their money for as many as seven years. In some cases, they may work as advisers for the company or take a more direct role in its operations.

Companies that are looking to partner with an angel investor may want to have any agreement looked over by an attorney to help ensure that it has sufficient regulatory compliance and that its terms are in the company’s best interest. In most cases, angel investors will ask for an equity stake in the company. An attorney may look to ensure that the stake is reasonable and that it allows an organization to acquire more capital in the future at a proper valuation.