Angel Investors (Meaning)| How Angel Investors Work? - YouTube

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subscribe to us by clicking the bell icon. today we have a topic with us is called

Angel investors who are an angel investors, nowadays you know in this

current era we are listening to this words like venture capital, angel

investors, incubators, accelerators, so who are all this kind of people so we are not

going to discuss all the rest but we'll try to discuss in this topic what are

the angel investors. Over here in this line it is returned a few lucky angel investors

have made up to the tenfold return on their investment in Irish software firm

first after the less than seven years ok fine that's just one headline for our

topic ok now what are the angel investors see angel investors are

basically high net worth investors there are

affluent individuals who provide the early stage capital they provide early stage

capital for the business during its initial startup stage because this

investors are often an entrepreneur family and friends but not always this

investors invest in a company which are at their very early stage with there is

no revenue visibility ok and the high level of the risk that is involved

since the level of risk involved in such type of investment is very high usually

they are investing initial capital in exchange for the convertible debt or

ownership equity that is they get control in the equity ownership of the

business in other words angel investors is someone who puts their own funds

during their early stage of the company and also contributes to that their

business experience so this are usually wealthy individuals who either invests

into personal capacity or through probably crowdfunding platforms online

or probably build angel investors network to pull in capital together and

then invest in an early-stage startup in which they have a personal liking to product

or find the business idea compelling enough to

a big success how do they work all the work okay we'll try and incorporate this

see starting a business requires great idea an execution capability on the part

of the entrepreneur among many other factors how along with this all this the

startup requires initial funding now you know starting a business it requires a

great idea and execution capability on the part of the entrepreneur among many

other factors however along with all of this a start-up requires initial funding

absolutely initial funding right and which forms the base behind it

converting the idea into profitable business so usually initial funding is

done by the entrepreneurs itself through what we call as bootstrapping ok.

bootstrap is a situation which entrepreneurs starts a company with the

help of personal finance however not all the entrepreneur

has funds to bootstrap their ideas into reality and such requires funding from

external sources so angel investors job is not to build company in which they

plan to invest but to make an investment or build angel investors network

which can be either or you can call as small investment for the idea or to get

started or it can be a large amount of and also to provide business insight and

to mentorship so this initial investment made by them is called seed funding ok

it's called seed funding and usually varies but it in or in most cases won't

be more than 1 million pounds it varies from country to country so angel

investors network represents the individual but investment that is done

through different business forms such as LLC trusts or investment funds or other

kind of the investment vehicles so this varies widely but the common similarity

among all the risk appetite they possess and minimal demand and control and

return they wish to have so they only take a share in the equity they only

take the share in the equity and of the business that holds no value at the time

of the investment in may become invaluable someday no I'll make

you understand the importance of angel investors see angel investors network

specializes in early-stage finance okay early stage business and they are focused

on helping the startups they help these startups take take their first step in

these testing the viability of the business idea usually invest in the

entrepreneur starting in the business rather than the viability the business

of an investment is made even before business viability is tested so the

capital that is provided by them can either take the form of a one-time

investment or it can be an ongoing capital can be any of the thing can be

ongoing capital that supports to help the company navigate through its difficult early-stage

and you know reach a level where products or service

has been tested and you know in venture capital can come forward for such

investments so they take a high-level okay they take a high level of risk as

the majority of the startup seeds by them fall during the initial stages and they

result in loss of investment for the investors hence you know these usually

takes a good share of equity ownership and have clearly defined the exit

strategies you can say that you know in the business and they invest

in the fund so they they fund promising startups in the hope that you know they

will be paid out several times the initial outlay once the company

becomes successful okay now we will deal with the types of angel investor the

first one are called the affiliated now this includes those investors who

personally know the business in which they are investing either directly or

through an angel investor network. 2 are called the opposite of that non

affiliated so it includes those investors who do not know the entrepreneur directly

and is not associated with the business line at all okay

so now the next is who can become an angel investor okay see

the criteria vary from country to country based on the legal jurisdiction

usually it includes minimum net worth of $1,000,000 in net worth excluding the

primary homes as for the SSC requirement and the minimum annual income AI

recommend is 2 lakh dollars as per ssc requirement and besides this an

angel investor needs to have a sound knowledge and must be well-versed with

the level of risk that is involved in making such an investment. Now I'll quickly

run you through the difference between the AI that is the angel investors and

the venture capitalists very quickly first, you know the meaning will be no it

includes wealthy investors individual who make an investment in early-stage they

are the early people who invests okay and promising startups in their personal

the capacity. It includes you know over here the professionally managed firms who

invests in the high growth potential business after the basic level of the

groundwork is done by the business itself who invests angel investments

precedes AI is before the VC that is the venture capitalists and as riskier

compared to the VC now venture capital investment succeeds the angel investment

is comparatively less risky and as a viability is already been done now the

the amount invested see usually the seed funding which can be a small or

large amount but not more than $1,000,000 okay not more than a million

pounds of dollars so it is largely on the size of the compared to the angel

investment so size matters you're over here there is involvement of business or

Angel investors provides the advice and guidance but are not involved in the

day-to-day functioning of the business over here the VC investment involves the

direct involvement in the business now the time usually takes less time and

paperwork and over here it consumes a lot of time and requires through throat

due diligence and research. So finally on final thoughts let's put down dot on

some things angel investors network they play a very important or an

indispensable role in the startup landscape not just they provide the

initial C capital but also they nurture the budding entrepreneurs with their

expert advice the end and in the mentoring mostly it was been found that

successful angel investors are the ones who have worked in the same industry as

compared as a company they stay they support by providing the initial risk

capital so angel investor network takes a higher risk as compared to the they

invest does not have much publicly available information these investor

needs to have high no judgement skills about the entrepreneur and in whose

promising business they plan to invest in the money so that's it for this

particular topic so that's it for this particular topic if you have learned and

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