Should I become an Angel Investor to invest in startups?

 

Should I become an Angel Investor to invest in startups?



Angel Investors typically invest in a startup in its early stages basis the idea and the entrepreneur. In return, they receive an equity stake in the company, and often the % of the company they receive is decided later when the startup raises a larger amount of funding for an institutional investor.


Startups are booming, should you Angel Invest in one?

It is true that startups are scaling very fast but they still come with a very, very high risk of failure and more so in the early stages.

You should invest only if you have the domain knowledge to assess the idea objectively and know the entrepreneur well enough to estimate their execution capabilities. You must also spend enough to keep up to date with industry and technology trends, other competing startups etc.



I have funds but not enough time but I want to allocate some part of my investment portfolio to startups.

It’s important to invest time to explore and diligence various startup ideas. This also requires that you have access to a pipeline of startups. If this is not the case, and you still wish to allocate funds to promising startups then investing via a VC fund may be a better option. VC funds are professional investors and have access to a strong pipeline of startups to qualify and assess.


Startups or not, IndiaP2P offers up to 18% per annum to retail investors in passive, volatility-free returns. You can start with just Rs. 5000!

Author: Neha Juneja


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