Once upon a time, the typical angel investment involved one or two individuals putting money into an enterprise started by a friend or family member. That type of investment is still widespread, and still vital to economic development. But one of the most important investment trends in recent years is the growth of groups or networks of angel investors who come together to share risks, knowledge, and rewards. If you want to be an angel investor, you don’t have to go it alone.
There are several reasons why angel investing is becoming more of a group activity. Perhaps the most important is that angels are taking on larger and larger projects. Established venture capital firms have become increasingly cautious in making investment decisions — especially when it comes to initial funding — and angels are stepping in to fill the void.
Larger projects obviously have larger capital requirements, but that’s not the only reason why angels are coming together to pool their resources. Larger projects also require more business experience and expertise. Groups of angel investors typically include members with a variety of business backgrounds. Besides providing funds for startups, they can offer the kind of coaching and mentoring that many budding entrepreneurs need. Angels can strengthen the management team, introduce best practices, and help create strategic plans.
The members of an angel investment group learn from each other as well. The typical group includes both novices and veterans. You don’t have to an expert to join.
Angel groups often come together around a common theme. For example, a group might specialize in clean energy or retail or hospitality. The members of the group feel more comfortable putting money into a venture because they understand the business they’re investing in.
Angel investing groups are springing up in key financial centers throughout Asia. According to Singapore Investment Network, 3.5% of adults in Singapore have made angel investments, and a growing number of these investors belong to groups.
Whether or not you belong to an investment group, Venture Hype offers a great opportunity to expand your investing horizons and get in touch with like-minded people — people who love the promise and the possibilities of angel investing.
* For series, references are published in the last installment of the series.