The angel investors are also known as the angel funders, seed investors, business angels, informal investors, or private investors. An angel investor provides fund or capital for an entrepreneur or startup to start any business. The fund is basically provided in the exchange for ownership equity or convertible debt. A large number of investors create angel groups or angel networks in order to pool their investment capital and give advice to their portfolio companies. The group of investors invests online through equity crowdfunding.
With investment crowdfunding, angel investors can easily navigate quality deals without going anywhere else. Before investing in any business startup, you must know every detail about the angel investor.
Here some basic types of angel investors:
- The player: The player is the one who have already started invested money, and sold one or more of their enterprises. You can also call them serial entrepreneurs. They are pretentious investors who consume less time on portfolio enterprises.
- The Silent Investor: The silent investors spend less time on the portfolios in which they invest. They just sit back and wait for the profits; that’s why they are called as the silent investors.
- The Hands-on Investor: The hands-on investors play an active role in the portfolios they invest. The risk of friction exists between the investors and entrepreneurs in the hands-on investment.
- The Professional Angel: The professional angel investors also take an active part in the portfolios. Meanwhile, they support portfolio enterprises by supporting their networks in order to enhance the value of the venture.
In the past 15 years, several angel investors have joined different angel groups to get high access with quality deals. There are over 330 groups in the US and Canada that are taking an active role in the startup community (according to the Angel Capital Association). One downside of becoming a part of an angel group is the time commitment of having to join their events and connecting with the group.
Angel investors typically invest between in new business start-ups with the aim of reaching them on to the platform where they can easily invite venture capital funding. The angel investors can take several advantages, but sometimes it becomes risk for them. Being an angel investor, how can you maximize the chances of getting success? You must research about the startup before investing. The in-depth research and proper knowledge of angel investment will definitely help you taking the right decision.