How to Become an Angel Investor
To become an angel investor you need to have enough
money to invest in business ventures and have experience
that could add value to the venture you invest in.
Money
A typical angel investor in the USA invests between USD
5000 to 500,000 in growing businesses. In the UK the investment
range is from UK Pounds 10,000 to 250,000.
Investment advisors generally recommend that angel investors
put no more than five to ten percent of their total portfolio
into these private equity investments. The most of their
portfolio should remain in the investments of stocks,
bonds and cash.
Skills & Experience
You should have business and management experience and
contacts in your area of expertise. With your business
experience you are more likely to be able to make a sensible
judgement about whether the company seeking money is likely
to succeed. You will also be able to contribute more to
the management of the company. If your business experience
is limited, the most sensible option would be to seek
to invest alongside people who are experienced, in a syndicate.
Research suggests that on average an investor spends
about 10 hours a week on the company's affairs. It would
obviously be helpful if your skills and experience are
complementary to the existing skills set in the business.
If your skills fill a gap in the venture's skills set,
you are less likely to be accused of "interfering"
in the affairs of the company.
Precautions You Should Take Before Investing
If you have not made a business angel investment before,
there are a few things to consider before investing in
a company:
