When starting off a business, there are a variety of methods to ensure that the right amount of money is collected and raised for its effective functionality. While all methods can be very effective in raising funds, only a handful actually work depending upon the nature of the business. Angel investing is one such method that is used by many businesses throughout the world. Angel investing has proven to be very profitable and effective for some businesses, and that is why different businesses have also adopted this method to collect funds. We will discuss all the details with regards to Angel investing and its profitability in great detail in this guide.
What is Angel Investing?
Before looking at Angel investing and seeing how profitable it actually is, one must have a complete and thorough understanding of what Angel investing actually is. Angel investors are actually individuals who have a very high net worth. These individuals invest money in startup businesses and hence buy a decent share of the business. This way in the case of the profits made by the company, the angel investors end up with a fair share of money as well. Angel investing has been a very common form of raising funds. It must be noted that companies like Uber, WhatsApp, and Facebook started off by luring in Angel investors. Initially, the money was raised using these investors and with time all these businesses became tycoons in the business world. What started off with a few thousand and million dollars for the Angel investors ended up becoming one of the best decisions of their lives since they ended up making a fortune. However, it must also be understood that Angel investors have a risk of ending up with little to no money towards the end. This totally depends upon the potential of the startup or the business, hence the Angel investor must invest money after thoroughly analyzing the scope of the business and the industry it aims to disrupt in the long run.
Who can be Angel Investors?
Angel investors can vary according to the nature of the business and the relationship the investor might have with the business. However, in most cases, Angel investors can be different people like family and friends who want to support the business, business executives who aim to grow with the startup, crowd funders who raise funds after making a small investment, and also entrepreneurs who have experience of running their own businesses. The majority of Angel investors are people who have capital that they want to invest somewhere and in return hope to get more money than they might in normal scenarios with stock markets.
How much can Angel Investors make?
Angel investors usually invest in startups that are highly attractive and have the potential of growing immensely. A typical investor may invest amounts ranging between $5,000 to $100,000. In return, if the startup ends up doing great, the Angel investor can end up with hundreds of thousands or most times, millions of dollars as well.