Angel Investing

What is Angel Investing? It is basically investing in start-up's or companies which require funding but have no track record. The person giving this money is called an Angel or god sent. We keep hearing that many people have made money by Angel Investing. But not many tell how much they have lost. I am not sure if you are aware, but 70% of all start-up’s fail. Then why do people still invest? People invest because the return is so high that it covers up the loss incurred. So if you are interested, you should have a lot of money to take such risks. You just can’t invest in one venture and hope it gives you returns. If you are ready to take a risk, you really have to be strong hearted knowing fully well that there are 70% chances that you will lose money.

Remember that your returns could give you assured returns of around 16% if invested in good large cap mutual fund over a ten year period compared to Angel Investing over the same period where the return is not assured and chances of losing this money is high. Sometimes the returns could be good, but the waiting period could be long. So if you require money, there are chances you might not be able to get it back, even if the value has grown. But then if you still would like to gamble or take a bet, you need to do a thorough study before investing. Given the efforts required to do the research, many people find it better to invest in mutual funds. You need to research the idea, business plan, marketing plan and of course the management and if you are so good at this research, then you might as well as start the business yourself. 

There are sites which do this type of research for you for a fee. There are many sites which have become a meeting place for Angel Investors and startups for a fee. The cost of research is high, so many people just register on meeting places, which can give you an investment opportunity. But at the end of the day, Angel investing is not for the light hearted.