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Glossary

 

Micromanagement Angels

 

Finance

Startup

 

   

Overinvolved and controlling type of angel investor

 

 

 

   

Definition

Micromanagement business angels are individual venture capital (VC) investors who prefer great control over their investments, often micromanaging them from a seat on the company board rather than through active participation.

By doing so,  micromanagement angels try to add value as well as money to each startup they invest in.

 

 

 

 

   

Positive and Negative Traits of Micromanagement Angels

A micromanagement angel becomes excessively involved in a startup's daily operations, demanding to have a say in every major decision and micromanaging the team. This active approach can involve offering advice, guidance, and close oversight of the business operations.

Although micromanagement can strengthen the guiding structure and build discipline, it keeps the entrepreneurial team locked within a limited range of action. Micromanagement doesn't work when passionate teamwork and continuous innovation is a priority.

Micromanagement angels often try to take a co-founder-like role, interfering in every decision, which can drain time and hinder the team's ability to move quickly. This level of involvement can cause confusion, slow down the venturepreneurial team, and make it difficult to work efficiently, ultimately hurting the company more than it helps.

 

 

 

 

About Business Angels

Business angels are private investors also called informal investors who invest in unquoted young entrepreneurial companies. These wealthy individuals are usually former entrepreneurs or executives. They provide not only finance but experience and business skills.

Investors of this type of investors is called business angels because they save struggling firms with both finance and know-how when no one else will. Business angels provide critical smaller rounds of seed and start-up capital.

Though angel investing has both its advantages and disadvantages, it is widely agreed that the advantages of business angels generally outweigh their disadvantages, making an active informal venture capital market a prerequisite for a vigorous enterprise economy.

In average, business angels fund 30 to 40 times more start-up ventures every year than venture capitalists.

 

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