7 good reasons to be an angel Investor

The new millennium has taken a turn towards expediting innovation and entrepreneurship. One hears about a new idea being funded every minute especially in the US and Europe. The trend has caught up now in Asia too especially with China, Singapore, and India taking the lead and others like Malaysia and Indonesia following them.

One of the reasons why a startup ecosystem sustains and thrives is the availability of capital for a founder to get started or to scale up. While funding for scaling a venture is the interest of VCs, seed funding for starting up is the interest of angel investors. Angel investors can be categorized into two types: structured and professional angel groups or unstructured and individual investors. Obviously, the structured and professional angel groups are making the most out of the windfall gains when a startup makes it big and they exit in future.

However, there is still a huge gap between the number of aspiring entrepreneurs and available angel funding. It is this gap, which could give a senior industry executive the opportunity to fill and garner a place in the space of angel investing.

Typically, founders and  top executives from Silicon Valley startups that grew to be tech giants are angel investors by default. Some do it actively while others passively.

But there are a few million executives globally in large entereprises who are yet to warm up for the game or may be sitting on the fence to jump the ship! Here’s 7 reasons I think it’s the best time to be angel investing:
1. Contributing to  an attempt by an entrepreneur who is innovating for the betterment of society through a valuable product or solution.

2. Participating in the bottom of the pyramid economy as one of the privileged few who benefited from managing a large enterprise which once was a small business or a startup too.

3. Securing a place in the innovation economy while being engaged in the routine of a large enterprise without any conflict of interest.

4. Benefit from the growth of the startup by taking up an active role, if and when the need arises.

5. Get to know the dynamics of a startup ecosystem as an insider.

6. Diversify your investment portfolio from standard offerings in the market such as fixed deposits, property, mutual funds etc. to a direct experience of investing into those value creators who drive the stock markets eventually.

7. Last but not the least; reap windfall gains of multiple times the original investment from an eventual exit by promoters to a larger acquirer or from a planned IPO.

There could be many other reasons too that one may find as most appropriate for their own involvement as an angel investor in a startup but the above 7 cover most of the well known reasons.

And the only obstacle to be an angel investor is the “fear” of loosing the small portion of one’s own net worth in case the venture idea did not take off as expected! Nevertheless, the feeling would be better than a roller coaster ride at Disneyland!