Photo by Precondo CA
Originally Posted On: https://www.mistershaka.com/what-is-an-angel-investor-and-is-it-a-good-investment/
You may be wondering what is an Angel Investor and how to become an Angel Investor? I want to clear up some of that confusion and hopefully help you on your journey.
What is Angel Investing
First lets talk about what an Angel investor is in a nut shell. Angel investing is when an individual gives financial support to a start-up or entrepreneur. Usually with the intent of ownership equity in the company.
Angel investing is important. Because it provides financial backing to those that may not be able to qualify for a bank loan. Because of interest rates that will eat them alive. Or they may just be looking for other possible investors.
Angel investing is a type of investment that presents to be risky. Due to the fact that the investment is a start-up with no proof of performance. Or with a small track record. Some Angel investors will usually only invest their excess capital funds into start-ups and entrepreneurs. To prevent the risk from destroying their high net worth.
The plus side to the risk is that if the start-up or entrepreneurial venture is successful. The investment will return more than that of a traditional investment return. Angel investors will usually do one of two things. Which are, either inject capital into a start-up for ownership equity. Or possibly stock in the company should it go big!
Angel investing is also great for economic growth. Because these types of investors create more opportunity for jobs by lending their excess capital.
How Do You Become an Angel Investor
I now would like to discuss how to become an angel investor. Becoming an Angel Investor really depends on the individual. On how they choose to invest into start-ups and/or entrepreneurs.
One way to start would be to set excess income from your job aside. Then, find traditional ways to invest that money. In hopes of producing an excess capital fund. To use on start-ups depending on the investment amount.
Another avenue is to join a platform like Wefunder and Republic . Which allows those with smaller amounts of money to invest in start-ups. You can become an Angel Investor with as little as $100! This is a great way to get started a lot sooner. Rather than waiting to acquire a larger sum of capital to become a part owner of a start up company.
The way to becoming an angel investor really involves finding a way to amass some sort of investment amount. Or joining a platform that allows you to be an angel investor. But on a smaller scale with lots of other people.
Whatever the path that you take. Enjoy the journey and never become discouraged by the obstacles. It can be a long term investment. But hang in there because it could pay off big time!
You will likely receive regular updates from the start up company. Sometimes they may even ask investors for input on company decisions. After all, when you become an Angel Investor you are part of the company! Mistershaka.com.