Angel, you must be aware of this word, right! In all the fairytales, ancient stories, mythological books, angels are the good souls who help the needy people. Likewise, angel investors help needy startup founders with funds.
Thus, be it angels or fairy tales or angel investors, the purpose remains the same, roles remain the same, but the mode of help and return policy differs. Both help people. Angels of books assist people with magic. But, angel investors help people with money or funds.
In return, they ask for a piece of business. But a point to be noted here is that Angels don’t just invest their money in an idea, their experience, time, values, and knowledge is served along with the money.
Angel Investors India, Mumbai Angel Investors, Bengaluru Angel Investors, etc, are playing a big role in the development of ideas into full-fledged businesses.
Angel investors are the people who provide capital to potential startups in exchange for a piece of the enterprise, generally in the form of equity or royalties. They, generally, are experienced entrepreneurs or ultra-wealthy people who understand the realms of business.
Everyone who invests in a startup is not an angel investor. Not all investors are angels. An investor who puts his/her experience, value, and knowledge along with the money is known as a true Angel investor.
Anyone can invest capital in an idea. But if the investor is giving them money and leaving right after putting it, then he is not an angel. To be a real angel investor you have to guide the startup founder towards success, you have to take a close look at their strategies and reframe them if needed. Thus, being an angel is nowhere a cakewalk. It’s like teaching your younger self how to be successful all over again.
Angel Investors India taps startups from networks of angel investors. Every metropolitan city has a network of their angel investors. Such networks help angels a lot to find a plethora of deals and startups to invest in.
Besides that, LinkedIn is also a tremendous platform to find talented and amazing startup founders. LinkedIn, with its thousands of creative and professional minds, is serving the consistent and quality lead flow to dedicated angel investors.
Another platform where angels can connect with Startup founders is Clubhouse.
Thus, there could be three ways to get deals as an angel investor. Firstly through networks like Angel Investors India and Mumbai Angel Investors. Secondly through LinkedIn and lastly through communities like Clubhouse.
Generally, angel investors expect annual returns of 20-40%. This percentage can vary but not much. Besides, on an average basis, an angel expects to get the complete retrieval in 5-7 years. Yes, the risk is there because angels don’t invest in a business, their investment is in the idea. But due to their fabulous business experience and being an entrepreneur, they understand where and when to take risks.
Another point to note here is that be it Angel Investors India or Mumbai Angel Investors or Chennai Angel Investors, purpose and returns remain the same. They are universal and don’t vary much.
Both angel investors and Venture capitalists invest capital in the businesses. Of course, they hope for the best returns along with some calculated risks. But are they exactly similar? Nope.
Angel investors’ sole purpose is to support an idea or cause. Often they are families or friends who are ready to financially back their loved ones’ ideas. Or sometimes, the reason for angel funding is when there is a match of values and goals.
Whereas, venture capitalists invest to buy the startup in the coming time or to make a long-term high return.
Angel investors most likely fund the startups when they need the financial back extensively. That’s why the name is Angel. Because all they see is your idea and talent. Angels invest in startups even before they prove themselves.
On the other hand, venture capitalists fund the businesses after they set themselves on the ground firmly. They tend to bore fewer risks.
Like these 2, there are numerous other differences between Angel Investors and Venture Capitalists.
To be a successful angel investor, you have to use your kind heart along with a clever mind. Because in angel investing the main goal doesn’t lie around getting a good return. The main objective of truly successful angel investors is to grow the business and the founder like his own.
Thus, on the same note, here are some tips you can follow to be a successful angel investor:
Be a friendly coach
As an angel investor, offer assistance with empathy and humility. Yes, be a coach but not a difficult one. You’re not there to scold them or be a harsh instructor. You have to be their buddy and help them in every way you can. Before being a good angel investor, be a good friend and coach.
Check the business plan & pitch deck of startups with eagle’s eyes
Generally, you can evaluate a startup from its business plan and pitch deck only. To ensure success, focus on the numbers put by the startup in the business plan because numbers talk a lot. Along with the pitch deck will tell you all about the market and monetization strategies. Thus, invest in startups that have robust monetization strategies.
Don’t invest in a domain you don’t know a thing about
Keep your head in the skull while analyzing startups. Don’t ever invest in a domain beyond your knowledge. Always put your capital in the firm and idea about which you know in and out. So that you can add true value along with the money.
Consider customer input as a sign of a product being a market fit
Establishing a loyal client base is crucial to a successful company. So, when you’re starting as an investor, look at what businesses have developed and talked to the individuals who utilize it. If they’re ecstatic and the reviews are outstanding, the product has built a lot of promise and your investment will be secured and helpful.
Make a portfolio of startups
As they say, failure is the first step towards success. It’s nearly impossible to succeed without facing failure. Thus, the case is similar in funding too. Success is not guaranteed every time. As mentioned earlier, the risks are always there. But an experienced entrepreneur knows the importance of calculated risks. Thus, if you are an angel investor don’t feel depressed if funding in one startup doesn’t work out. Keep on exploring intelligently and you will move ahead on the stairs of success gradually.