Understanding What Angel Investing Is
There are select individuals across the world who are accepted as accredited investors. These people are wealthy individuals who have an interest in new business investments and play a very active role in financially backing startups, that they think have the potential to be successful. These wealthy people commit a segment of their portfolio to startups and are called angel investors. Every country has its fair share of them and they might participate in a round of financing either as individuals or as a group, with family and friends.
The Origin
The origins of the actual term -€angel investor€ comes from Broadway. It was used to describe any person who provided finance for theatrical productions. Current day angel investment professionals are a far cry from those who sunk their investments into plays and theatre. Today, big bucks are in involved and the stakes are very high. These investors back start ups with potential and also own a part of that business. In most cases, these people are veterans from the industries that they choose to invest in and have been at top tier posts in very large corporations.
The Perks
Apart from the finance they provide an entrepreneur, they are also a very rich source of knowledge and can provide insight and advice to the entrepreneur. By virtue of their tenure in the field, they also wield a lot of clout and can provide the entrepreneur with introductions to other influential people in the field. This can open up the ground for some more funding. Studies have proved that angel funded startups have a much higher chance of survival than those that have been backed by any other funding.
The Interest Quotient
Typically, angel investments are high-risk propositions and this strategy generally does not represent more than 10% of the investment-portfolio of an angel investor. These individuals look for a good management team and a good market that will have the potential to return 10-times of their base-investment, within a span of 5 years. In most cases, the liquidity events or exits are in the form of an IPO/ acquisition. As a rule, this special group of investors will sink their funds into industries that they have worked in or that hold their specific interest.
The Favoured Industries
There will be individuals who have an interest in different industries. Angel investors are largely known to favour startups who operate in industries such as the Internet, healthcare, mobile & telecom, energy & utilities, electronics, consumer products & services and other industries in that order. Technology is one field that has always been seen a lot of angel investment funding and that trend is not one that will not abate. These investors are attracted to investing in startups because of the potential of returns. But what drives them even more is the fact that it gives them the chance to be a part of something very great and successful.
Google was kick-started with angel funding and so were numerous other successful tech companies. Thus, if a startup has true potential, and the entrepreneur demonstrates perseverance, determination commitment and honesty, they have a good chance of attracting significant business investments from angel investment players.
The Origin
The origins of the actual term -€angel investor€ comes from Broadway. It was used to describe any person who provided finance for theatrical productions. Current day angel investment professionals are a far cry from those who sunk their investments into plays and theatre. Today, big bucks are in involved and the stakes are very high. These investors back start ups with potential and also own a part of that business. In most cases, these people are veterans from the industries that they choose to invest in and have been at top tier posts in very large corporations.
The Perks
Apart from the finance they provide an entrepreneur, they are also a very rich source of knowledge and can provide insight and advice to the entrepreneur. By virtue of their tenure in the field, they also wield a lot of clout and can provide the entrepreneur with introductions to other influential people in the field. This can open up the ground for some more funding. Studies have proved that angel funded startups have a much higher chance of survival than those that have been backed by any other funding.
The Interest Quotient
Typically, angel investments are high-risk propositions and this strategy generally does not represent more than 10% of the investment-portfolio of an angel investor. These individuals look for a good management team and a good market that will have the potential to return 10-times of their base-investment, within a span of 5 years. In most cases, the liquidity events or exits are in the form of an IPO/ acquisition. As a rule, this special group of investors will sink their funds into industries that they have worked in or that hold their specific interest.
The Favoured Industries
There will be individuals who have an interest in different industries. Angel investors are largely known to favour startups who operate in industries such as the Internet, healthcare, mobile & telecom, energy & utilities, electronics, consumer products & services and other industries in that order. Technology is one field that has always been seen a lot of angel investment funding and that trend is not one that will not abate. These investors are attracted to investing in startups because of the potential of returns. But what drives them even more is the fact that it gives them the chance to be a part of something very great and successful.
Google was kick-started with angel funding and so were numerous other successful tech companies. Thus, if a startup has true potential, and the entrepreneur demonstrates perseverance, determination commitment and honesty, they have a good chance of attracting significant business investments from angel investment players.
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