Equity Investing Information

Stocks - Mutual Funds - Private Equity - Real Estate

Angel Investing

Angel investing is an extremely high risk form of personal investment, where a single high-net-worth-individual offers a large amount of capital (often in the millions), in exchange for equity in a start-up business.

Angel investors usually maintain direct contact with the funded company for the entire duration of their investment, and often insist on a predetermined exit strategy, whereby their capital is returned (with interest) after a certain length of time, via an IPO or acquisition deal.

Before one can become an angel investor, they must not only possess the necessary investment capital, but also have the financial knowhow to spot good companies and gage the potential ROI (return on investment) of each opportunity. These investors need the ability to act on real facts and information, as opposed to simple excitement or passion.

The return on angel investing opportunities is potentially enormous, but the losses on a failed deal are all-too-often 100%. That's why angel investors should know their limits and avoid investing more than they can afford to lose.