You can be an Angel Investor

We think of angel investors as people who have cashed out of their businesses and who swan around distributing funds from their own massive reserves to interesting start ups.

Image: Francesco Marino / FreeDigitalPhotos.net

But you don't need money to be an angel investor.

You have a raft of skills which are fantastically useful to most new businesses:

• You can build websites
• You can create a effective social media presence
• You can leverage the power of the internet

Sure, you can sell those skills to businesses - I do that quite often. But I also meet many people who have a solid idea, but who simply don't have the funds to pay me to give it the best chance of success.

If you're faced with that situation, it's easy to walk away. But there's another option.

Trade your time for equity or a profit share.

You know how much what your offering is worth, and the other party should have a clear picture of the value of his or her business.

Apply some common sense:

• Is there an achievable business plan?
• When will there be profit?
• Will there be sufficient cash flow to keep going in the early stages?

If it looks like a sound proposition, then make an offer! At a simple level you can simply be paid your fee when they can afford it and you've won a "lost" sale, but at a more complex level you can have an equity stake in a new company.

The latter is attractive because someone else is responsible for driving that business on. If you've decided to invest in the right person and the right company, then you can sit back and watch your equity grow on the basis of someone else's work.

So next time you're talking to someone with an exciting idea, don't walk away when they tell you they can't afford you. Look deeper, and maybe strike a deal.

I've done this a few times over the last year or so. In some cases I've made my money back and more, in others it hasn't happened yet, but I'm sure it will. What I have built up is a small network of investments in local companies and it's cost me nothing more than a little time and the occasional update meeting.

Want some examples? Here's one, and here's another.

Have you done this? How's it working out?

These might interest you:

1/ How the blogging market is changing

2/ Transglobe Blog - the world in a blog

3/ First forays into making money from a blog