• Angel investing is the practice of high-net worth individuals investing in equity of start-up businesses with the goal of profiting from their long-term growth. Such investments also associate the typical equity investing risk, and also that start-ups are in the early stages and some will likely fail. But other than profiting, the motivations are personal interest, desire to give back from one’s own experience, and the thrill of being involved with an innovative company.
• Angel Investors are typically, passion driven individuals who are smart investors and believe in investing in high growth businesses opportunities of tomorrow. Therefore, angel Investing is much more beyond the money and hence an angel, apart from money, does bring with him: Mentoring Support for the startup, Opening business growth oportunities for the startup and Strategic Guidance at various stages of the life cycle of the startup.

• Angels are typically high net worth individuals with considerable entrepreneurial or business executive experience who have a lot to offer to start-ups and the local entrepreneurial ecosystems.
• Angel Investing is one of the most intelligent investment asset classes which is highly passion driven.
• Angel Investors back businesses of tomorrow by funding, mentoring and guidance, opening business expansion opportunities and everything else that accelerates the growth trajectory of the startup.
• Angel Investors view early stage investing as high risk but highest rewarding asset class.

• Novel business concepts and products
• High growth, fast scalable and less capital intensive businesses
• Companies not sufficiently developed so as to be self sustaining yet
• Businesses that need both external funding & mentoring to grow to the next level

• Investing in alternative asset class
• Active form of investing as opposed to traditional passive investments such as stock markets, real estate etc.
• Opportunity to engage with and mentor the next generation of entrepreneurs that are likely to create impact on society in terms of wealth and job creation
• Probability of multi bagger return on investments

Now most wealth advisors believe that alternative investments are a necessary part of a healthy and diversified portfolio plan.
Alternative investment includes:

• Real Estate (passive, average returns and cyclical)
• Commodities (passive and market linked)
• Hedge Funds (not available in India and extremely complex)
• Private Equity (private investments in companies) and broadly this includes Venture Capital and Angel Investing. Only angel investment can be initiated with small capital, rest require significant allocation and are passive.

By investing in start-ups at an early stage, a single investor can take positions in multiple start-ups with a limited capital. The best way to begin angel investing is to allocate a certain portion of the investable capital for startups, and then breaking it down into multiple calculated investments so as to create a diversified portfolio, thereby spreading the risk.

• Stage of the company
• Size of the market opportunity
• Compelling strategy
• Competition mapping
• Proprietary technology (if any)
• Strong founding team
• Potential exit opportunities

Successful start-ups move to the next rounds of funding called Series A, series B and beyond. A typical exit comes when a larger investor from these rounds buys your shares. An exit time frame may vary from 1 year to 7-8 years, but a typical exit would take around 24-30 months. Also, sometimes the start-ups business catches the attention of a large strategic investor; traditional corporate or other well-funded start-ups for its strategic value and an acquisition takes place, providing exit to early stage investors. New avenues such as MSME listing on stock exchanges have come up which over a period of time are likely to become platform tor liquidity.

While individual angels are incredibly important, there is only so much one person can do alone. Being part of an angel network and investing in group overcomes imitations associated with solo investing in the following ways:

• Robust deal screening processes that allow for multiple “checks and balances” before presenting a startup to the investors
• Large number of curated deal flow throughout the year
• Start with small capital and still be part of a successful syndication and create a portfolio
• Hassle free pre investment and post investment processes; because all activities from screening, due diligence, negotiation on terms, legal paperwork for investment to post investment reporting and periodic sharing of updates and connecting to Venture Capital firms for next round are managed by the angel platform
• As a group, individual investors participate in larger funding rounds, effectively investing in start-ups that already have business traction thus reducing risks associated with very early investing
• New angels can learn from experienced investors by being investing partners across multiple investing groups