Should I Become an Angel Investor to Invest in Startups?

Angel Investors typically invest in startups in their 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?

Startups are indeed scaling very fast but still come with a very high risk of failure more so in the early stages.

You should invest in startup companies 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 with industry and technology trends, other competing startups, etc.

I have funds but need more 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.

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