What is angel investment?


Angel investment is actually a form of stock investment. This word was first born in the United States in 1978 and originated on Broadway, New York. Angel investment refers to some investors with huge wealth who make early direct investments in high-risk start-ups with great development potential. It can be said that this is a relatively spontaneous and decentralized way of investment. Then, these investors with vision are called "investment angels", so this kind of investment capital is called "angel capital".

If you are a person who can skillfully make bread and want to open a bakery, this is very good, but you probably do not have the initial capital. At this time, your relative knows about it, and he still has a lot of spare money. After judgment, this relative thinks you are a reliable and trustworthy person, so he thinks you have development potential, decides to help you, and gives you 200000 dollars as the initial starting fund for establishing your bakery.

The investment your relatives give you at this time can be regarded as seed round investment. If your bakery business is getting better and better a year later, you think you can open two branches to further expand the bread business. At this time, a boss who patronizes your bakery every day heard about your idea of opening a branch store, and he thinks that your bread tastes good and the development of the bakery is also good, so after judgment, he invested 500000 dollars for you. With the investment of this boss, you successfully opened a branch store.

Do you know why an investment in a start-up is called "angel investment"? When you are worried that you do not have funds to expand your business, investors will come like angels and give you money to develop, so this is called "angel investment". The general angel investors mainly come from three main sources:

1. Rich family

2. Former entrepreneur

3. Senior managers of large multinational companies and high-tech companies

Not only that, in many developed countries, national governments often become angel investors. Many times, many angel investors are entrepreneurs. Because they are developing in this industry, they are very aware of the difficult situation of an entrepreneur in his early days, so they are more willing to invest in these startups. For startups, angel investors must be the best financing target. These angel investors may not be the millionaires we think, but may also be your family, relatives, neighbors, friends or unknown investors.

Angel investors can not only bring financial support to startups, but also network support. If angel investors have high visibility, they can also use their visibility to bring credibility and attention to startups.

Angel investment is usually a participatory investment, which can also be considered as value-added investment. Why do you think it is participatory investment? This is because many angel investors often participate in the business of the start-up companies they invest in, and will use their rich industry knowledge and experience to help the start-up companies make decisions, provide consulting services, recruitment, public relations, etc. However, this is also the practice of some angel investors. There will also be some investors with different attitudes, who often choose not to interfere with the company's affairs, let alone participate in them after investment.