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5 reasons why should you join this Angel Network
- You get to invest in quality start-ups with even a small sum, because the funding is pooled within the group
- You get to invest across different sectors and industries, giving you a breadth in your investment portfolio
- You get to participate in your start-ups’ growth journey and navigate towards success; by providing guidance & mentorship as well as by giving them access to your network of customers & partners
- You get to reap the rewards of a higher chances of success, because the evaluation is done by experts in the fields of technology, business as well as functional areas
- You get to be a part of the huge professional network across the globe at a nominal annual membership fee (customized for Individuals, Corporates and also those with large investment appetite)
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Would like to get a taste of how things are… find interesting startups, hear them pitch, interact with founders and then decide to join DFAN.
What is meant ANGEL INVESTOR?
An angel investor (also known as a private investor, informal investor, seed investor, business angel or angel funder) is a person with high-net-worth, who invests in a new or small business venture or provides financial backing to small startups or entrepreneurs, typically in exchange of ownership equity in the company or convertible debt. Any angel investor also helps in providing capital to the start-up or for expansion of such a business setup.
Who Can Be an Angel Investor?
The term ‘angel’ came from the Broadway Theater, where affluent people gave money to thrust the theatre productions. The term ‘angel investor’ was first given by the University of New Hampshire’s William Wetzel, who was the founder of the Center for Venture Research.
Generally, Angel investors are the individuals that have gained the ‘accredited investor’ status. But today, with more and more people looking to expand their Financial Investment Portfolio, this is not anymore a prerequisite.
Fundamentally, Angel Investors, as individuals, have the finances as well as the desire to provide funding for startups that may or may not be in their initial phase. This is welcomed by cash deficit startups who find angel investors to be far more appealing than other, more rapacious, forms of funding.
Angel investing has increasingly developed over the past few decades as the attraction of high profitability has allowed it to become a primary source of funding for many startups. This, in turn, has encouraged new innovations which in turn further up into economic growth
What kind of an Investment Profile should an angel investor possess?
Angel investors who provide funds to the startups should know that startups may fail during their early stages and that’s where the investor loses their investments completely. This is why all the professional angel investors look for opportunities with a predefined exit strategy, acquisitions, or initial public offerings (IPOs).
The effective internal rate of return for a successful portfolio of angel investors is approximately 22%. Though this may appear good for the investors and seem too expensive for the entrepreneurs, especially with the early-stage businesses, the more economical sources of financing, such as banks, are not usually available for such business ventures. This makes angel investments perfect for entrepreneurs who are still monetarily struggling during the starting phase of their business.
In India, an individual investor generally has net tangible assets accounting to at least INR 2 crores excluding the value of his/her principal residence. They need to identify the startups whom they desire to help.
Angel Investing is not just Portfolio Management that you can play singularly and blindly. Angel Investments need to be mixed up with various target industries, especially the ones you have experience in.
For example, if you are interested in only the eCommerce industry, you can invest your funds in a variety of businesses working under this category as many new industries based on different segments in eCommerce are emerging every day and many of them are stably sustaining in the market.
Research is the main key to build up your initial strategy about the industries that you would like to invest in and how much risk you will be facing. Angel Investors usually align with the opportunities that are associated with industries belonging to fields which they are already familiar to or have been recommended by someone.
Research conducted reveals that more than 50% of all the Angel Investors more commonly lose a part of, even half of, and sometimes the whole of the investment made by them depending on the startup they invested in. It is a high risk, high rewards state of affairs, promising more elevated returns than other types of private equity. But angel investing comes with its risk.
Nowadays, the start-up industry is booming in the market with new ideas coming from all directions, angel investing has become a popular way of investment. Thus, it is broadening the horizon for even many small investors to develop their portfolio into angel investing. Investing funds in an early stage start-up is relatively easier for highly experienced and high net worth investors, who can afford the risk and losses. For small investors, research becomes very important.
This involves a quantitative study on the start-up you want to invest in, which requires a first-rate knowledge of business and accounts. It is difficult to correctly predict the revenue that will be generated, but you can gauge the potential growth and worth through numbers. It is very important to study the annual accounts of the firm you have on your radar, the balance sheet, income statement and cash-flow statement to assess the potential in the start-up.
An exceptional product is not enough to draw investment in it. It has to satisfy a market need, possess problem-solving approach and on top of that even, there are many other norms to assess a start-up. As an investor, you are not only investing in the product, the scheme, and the ROI, you are also investing in the people, their experience, their business acumen, intelligence, knowledge, expertise, and other skills.
So a thorough analysis becomes an important part of the investment. With thorough research and verification of the company’s accounts, documents, purveyors, end customers or consumers, etc. you can analyze the sustenance of a startup. As you network with more and more fellow investors and entrepreneurs, you will develop opinions regarding the business model, exit strategies, takeovers, etc. Till then it is wise to take expert advice and possibly join any Angel group like DF Angels Network.
Angel investing is a skill that can be acquired over time with effort, and experience. DFAN is one of the most esteemed and thriving angel networks in India with successive investors from across the country, from many industries and sectors. Join us as an angel investor and simplify the entire process.
There are several angel groups, funds, networks, clubs, and platforms for angel investors where the investors can team up and learn from each other’s experiences. More insights and wide-ranging experiences can lead to high success rates and better investment decisions. An inexperienced Angel Investor should join a group of like-minded investors who can assist in decision making in terms of deal assessment, deal construction, and risk mitigation processes.
DFAN is one such group that will guide you and help you process, research, and decide where you can invest your funds for better returns. Instead of investing blindly, you can make greater profits by putting your money in DFAN and making profits with the help of our experience and expertise. You can apply to be a part of Digital Futurists Angels Network which is one of the most esteemed and thriving angels networks in India and may help you towards a better investment strategy.