It’s commendable that you’ve chosen to seek insightful pre-investment ideas and practical first-hand tips before committing your cash. You’re an impressive departure from several other folks who mistakenly assume that they know everything about angel investments, only to end up regretting rather too late.
Since angel investors are often well-to-do individuals who offer capital/funding to business startups, normally for ownership equity or convertible debt, it’s advisable to conduct a bunch of research until you find the most promising and rewarding startups out there.
As such, these 5 angel funding tips should help you succeed in this risky, lucrative investment path. They include:
1. Gather Ample Understanding of How Angel Funders Make Money
Ignore any of the lucky stories of guys who consistently put money in startups that returned multiple digits in an incredibly short time period. Not everyone can be that constantly lucky. Choosing the right investments to fund is an involving process that starts with knowing/studying how others have made good money as angel investors. Analyze various funding possibilities. Diversify your monies across apparent win-win choices.
2. Carry Out Some Painstaking Legal Consultations
Despite all your pre-investment prudence and due diligence, choosing to spend your cash on an entrepreneurial venture inevitably tags along the naturally understandable fifty-fifty odds of both success and failure, profit and loss. As such, you should seek expert legal counsel before wiring your money. Specifically, pick a lawyer who handles angel investment documents for investors and entrepreneurs. Here at, we have many attorneys who have assisted angel investors with their various legal needs.
3. Design Your Investment Strategy
Any truly viable angel investment ought to have a distinct financing strategy. For instance, a new investor like you should: decide to use the least amount of money possible(what you can afford to lose), choose the most secure types of businesses to fund, join an angel investment group for further insights and ideas, among many other experience-building actions/steps.
4. Meet the Startups’ Leaders
Before financing any startup, it’s wise to meet the board members and try to get a convincing “gut-feeling” that they’re at least professional enough and wholly business-oriented. Some angels require multiple meetings whereas some just want to meet once. Nonetheless, it’s smart to meet at least once.
5. Identify How to Offer Additional Help If/When Necessary
Given that the success of the enterprises you support is inextricably linked to yours, you may want to provide additional assistance such as contacts, corporate guidance, essential references or recommendations. Prior to wiring them money, make sure that you put in place smooth communication channels and procedures for continual correspondence/interaction.
I hope this helps! Again, feel free to turn towhen you need a top-notch attorney to assist you with the due diligence and paperwork. Our marketplace is super easy to use and we offer free initial consultations. Good luck!