Funding by a high net worth individual is a popular kind of funding option for startups. High net worth individuals in Texas USA are also known as angel investors. These wealthy individuals come forward to invest in startups particularly during the early stages of businesses. In some cases, high net worth individuals can also join hands with other investors in their network and form an investor pool. Most probably, a high net worth individual may come forward to fund from a few thousand dollars to as much as a million dollars depending on your business size and how much they are convinced of your potential to give them high returns in future.
Credentials of a high net worth individual
Typically, a high net worth individual is one whose net worth is more than $1 million or who earns more $200,000 in a year. These figures can serve as a credential to find out a prospective and reliable high net worth individual investor.
How do they decide?
Most high net worth individuals might not probe into your technology or processes. They might not want to scrutinize your financial model. They will come forward to invest in your startup once they like you, your team and the problems you solve through your products or services.
How it works?
Some high net worth individuals can choose to manage their investments through their family office. In such case, there can be someone made responsible from their end to make the investment decisions. In this kind of set up, there can be a little more complex structure to the whole process.
Convincing a high net worth individual to invest
While motivating a high net worth individual to fund your startup, you must be able to convince them on the following. Usually these are jack of all trades with a wide knowledge about different industry segments and how they work. However, they might not have a deep knowledge relevant to your industry. They will like to understand where your business fits in and what problems it solves. Also, they will be interested in knowing when they will get their capital and in which form.
The scope for future investment
High net worth individuals in Texas USA are playing with their own money. Hence though they might be wealthy, they might look at the money coming out of their personal bank accounts. In some cases, high net worth individuals can also choose to invest in an incremental manner. Hence the startup can keep updating them on the development of the business performance from time to time. If something important happens with the business, you might approach them seeking for additional investment.
The investment model involving a high net worth individual works successfully when a win-win situation is created by the startup in course of its development and growth.