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The Angel investors guide to startup investing.

First question arises in our mind – who are Angel Investors? Angel investors are the professionals from different fields may be doctor, engineer or lawyer, business associates, serial entrepreneurs interested in helping the next generation. They are the ones who are ready to invest in the startups in return for the equity from them & hope that company will be successful along with their invested sum.

If you want to invest into startups & looking for the start along with the right path. This article is there for you!

Angel investors are the people who are looking for higher returns than normal stock returns. Amount of investment differs from startup to startup & from person to person while generally angel round raised with 5-7 angels putting their amount together.

The first step towards angel investing is to screen the deals thoroughly, then due diligence for the startup is required, agree to the term sheet. After this process, raising of money will be done along with finalising legal documents & all this leads to closure of the deal at the end.

Unlike the stock market investing in which you all need brokerage account to start trading. In Angel investing its’s difficult to source deal flow. Information about startup is not available just like the listed public companies. So it’s always advisable to connect with an Angel network & begin investing in a pool with the group of other angels as due diligence plays an important role which is done by the angel network.

To start with angel investing follow these steps-

  • Figure out your asset allocation ranges, it’s always beneficial to put 10-15% of your net worth into angel investing & gradually increase the percentage with time.
  • Connect with other Angel investors & learn from them & try to invest in a pool along with the people having well versed knowledge of startup investing.
  • Deal flow searching will be done, best way for this is to connect with an angel network & they will handle the due diligence, legalisation processes along with verification of startups.
  • Invest in a diversified way, make investments into 6-10 companies starting with the smaller sums.

That’s all you need to take hold on to be an angel investor. Enjoy the returns generated by the successful ventures.

Happy investing!


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