Angel Investments Helping Young Entrepreneurs

An angel investment is a type of investment in which a business angel, angel investor, or an informal investor who provides the capital for the start up of a business in the exchange of owner equity or convertible debt. In this form of investment, the investors organize them into angel networks for sharing their research and also pool the investment capital. In the angel investment investors, unlike venture capitalists, invest their funds while managing pooled money that other people in a managed and professional form of fund. These types of investment bear high risks and are also subjected to the dilution from future rounds of investment. The investors need a high return on their investment. The early stage companies usually fail because of the lost of large percentage of this angel investment. There are angel investors that are professional and they seek the investment having potential to return almost 10 times or even more than its original investment and in the 5 years.

The term ‘angel’ that is used in the angel investment is typically originated from the Broadway where this term was used for describing the wealthy individuals who are known for providing the money for the theatrical productions. The investors that invest funds in this form of investment are usually retired executives or entrepreneurs, who have many interests in investing the money for a number of reasons. The main reason include that they want to make use of their networks and experience on full time basis and they also want to monitor the new generation of entrepreneurs. Angel investors not only provide the funds but they are also involved in providing the important contacts along with valuable advice about management. There are several ways of meeting to the angel investors that usually includes the symposia and conferences held by the investors.