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An angel sits somewhere between your “friends and family financing” and a venture capitalist.  The typical range of financing is between $100K and $500K in exchange for a fairly large chunk of your equity.  Equity financing is when you receive cash in exchange for equity while debt financing is when you receive cash and must pay back the principle plus a negotiated interest rate or finance charge. 

Since most angels provide equity financing, there is usually no need to pay the money back.  Of course, different investors have different rules so it is important to clearly understand the terms of the agreement.  If your company is losing money, make sure you understand why before speaking to an angel.  An angel will not be interested in financing your business if he thinks it is just a hobby for you.  If you have tapped out all of your credit cards, cannot get another dime from your parents, and are too small to be noticed by a venture capitalist, an angel may be your perfect solution.

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