About Angel Investing
Being an angel investor means either, or both, pursuing a passion to be involved in the exciting and challenging start-up phase of a business, and having an appetite for investing your own cash in a number of high risk ventures run by other people.
The opportunity is certainly there, in many cases, to get involved as an executive of a company in which you have invested but, the goal of angel investing is NOT to buy yourself a job.
By gathering together with like minded individuals in an angel group you can enjoy the camaraderie of sharing a hobby, develop the trust to benefit from shared experiences, extend the scope of your portfolio and have greater confidence in managing your risks.
Or in short – Have fun making money with friends.
Types of Angel Groups
Angel investor groups vary in structure, formal to informal. Formal groups follow strict participation requirements that guide members' minimum investment activity and event attendance. Some groups pool members' capital to make investments on the group's behalf, while others allow individual members to invest in specific deals of interest.
A typical angel group's investment ranges widely from $50,000 to $500,000 per deal, depending on how many group members are interested in the deal. While no two angel groups operate exactly alike, most angel groups maintain a local or regional geographic focus in order to maximize members' ability to actively engage in the growth of their investments.
Angel groups often have web sites that provide directions for business plan submission. After screening business plans for top-quality deals that match the group's criteria, these groups organize regular monthly breakfast or dinner meetings for members to hear pitches from companies selected to present.
If the group (or members of the group) decides to proceed, interested members commonly collaborate on due diligence and deal negotiation. Based on the group's structure, investments are either made directly by individual members, or by the group as a whole. Most groups apply standard terms to their investments, with some flexibility to negotiate.
Angels typically invest between $25,000 and $100,000 per transaction individually, and up to $500,000 as a group. They invest in one to four transactions per year. On average, angels are patient, with an average term for holding an investment of eight years. For the risk and added value they provide, angels seek returns of at least ten times their investment.
MIT's Entrepreneurship Center identifies four types of angel investors these include:
Guardian Angels Bring both entrepreneurial and industry expertise. Many have been successful entrepreneurs in the same
sector as the new companies in which they invest.
Entrepreneur Angels Have experience starting companies but come from different industry sectors.
Operational Angels Offer industry expertise - often from experience working for large, established companies - but may lack
first-hand experience with the travails of a start-up.
Financial Angels Typically invest purely for a financial return.
The opportunity is certainly there, in many cases, to get involved as an executive of a company in which you have invested but, the goal of angel investing is NOT to buy yourself a job.
By gathering together with like minded individuals in an angel group you can enjoy the camaraderie of sharing a hobby, develop the trust to benefit from shared experiences, extend the scope of your portfolio and have greater confidence in managing your risks.
Or in short – Have fun making money with friends.
Types of Angel Groups
Angel investor groups vary in structure, formal to informal. Formal groups follow strict participation requirements that guide members' minimum investment activity and event attendance. Some groups pool members' capital to make investments on the group's behalf, while others allow individual members to invest in specific deals of interest.
A typical angel group's investment ranges widely from $50,000 to $500,000 per deal, depending on how many group members are interested in the deal. While no two angel groups operate exactly alike, most angel groups maintain a local or regional geographic focus in order to maximize members' ability to actively engage in the growth of their investments.
Angel groups often have web sites that provide directions for business plan submission. After screening business plans for top-quality deals that match the group's criteria, these groups organize regular monthly breakfast or dinner meetings for members to hear pitches from companies selected to present.
If the group (or members of the group) decides to proceed, interested members commonly collaborate on due diligence and deal negotiation. Based on the group's structure, investments are either made directly by individual members, or by the group as a whole. Most groups apply standard terms to their investments, with some flexibility to negotiate.
Angels typically invest between $25,000 and $100,000 per transaction individually, and up to $500,000 as a group. They invest in one to four transactions per year. On average, angels are patient, with an average term for holding an investment of eight years. For the risk and added value they provide, angels seek returns of at least ten times their investment.
MIT's Entrepreneurship Center identifies four types of angel investors these include:
Guardian Angels Bring both entrepreneurial and industry expertise. Many have been successful entrepreneurs in the same
sector as the new companies in which they invest.
Entrepreneur Angels Have experience starting companies but come from different industry sectors.
Operational Angels Offer industry expertise - often from experience working for large, established companies - but may lack
first-hand experience with the travails of a start-up.
Financial Angels Typically invest purely for a financial return.
