Just about any entrepreneur, whether starting a business or expanding an existing one, can use some financial intervention. When traditional lending avenues turn you down, angel investors can be the break you need to finance your business plan.

Angel investors are individuals from all walks of life who invest money in businesses. They might be wealthy individuals with the ability to take a risk, or a group of successful business people looking to help another entrepreneur start or expand a business. According to the U.S. Small Business Administration, there are about 250,000 angel investors nationwide, funding an estimated 30,000 small companies annually.

There is no set limit on the amount of money an angel investor will lend to a business. Unlike banks, venture capitalists and other traditional loan sources, angels have much more flexibility in their lending criteria. But the funding does come with some caveats. Most angels require involvement in the business, whether hands-on or as an outside consultant. After all, they are expecting a good return on their investment. For that reason, you need to be sure you’re a good match with your angel, both from a goal-oriented and personality standpoint.

An angel investor’s involvement in your business and their expectations should be discussed early on in the relationship to prevent the angel from taking complete charge of your business. It is reasonable for an angel to expect between a 5% to 25% share in the business, a position on your board of directors, weekly updates and quarterly reports.

To attract an angel investor, it’s important to have a solid business plan that shows your company’s growth potential, the expected revenue projected over five years, how the money would be spent and the experience of management to carry out the business plan.

There are individual angel investors or groups comprised of angel investors in just about every U.S. state. A business attorney generally has connections to local angels, or you can search online for angel networks. Family, friends and business contacts might also be able to put you in touch with angel investors. You should also try your local chamber of commerce or small business administration office for angel contacts.

There are several advantages to turning to angel investors for funding. For new entrepreneurs, angels are more open to investing in risky and new enterprises. In addition to being a viable funding source, angels have a wealth of experience as successful entrepreneurs themselves and can bring valued experience to your business venture.

For some entrepreneurs, angel investors might not be the best route for their business. The biggest disadvantage is giving up a certain amount of control of your company, from equity to hiring decisions. You will also be paying a significant return on investment as part of the angel’s exit strategy.

When researching whether angel investors are the best source of funding for your company, remember that it will be a long-lasting relationship of at least five years or until you can pay back the agreed upon return on investment. But by selecting the right angel, you could make a heavenly deal that brings success to you and your investor.

What do you think of Angel Investors? Would you be prepared to part with a percentage of your company for cash?

Matthew Toren