Angel investor guide
Below some considerations for new Angel investors and how FundedbyAngels help
Have an investment strategy
Develop a clear investment strategy that aligns with your financial goals, risk tolerance, and sector preferences. Determine the amount of money you are willing to invest, the types of companies you are interested in, and the stage of development you prefer.
- FundedbyAngels typically invest in seed or pre-seed stages of start ups. We typically invest between 10K-70K in portfolöio companies with individual angels investing as little as 1K to limit exposure.
- Most of our investments are in commerce related business that sell products or services to consumers or companies, or start ups that are in the commerce ecosystem (market places, payments, enablers)
Build a network
Seek out trusted advisors and other angel investors who can help you evaluate investment opportunities and provide support to the companies you invest in. Be prepared to provide guidance, advice, and mentorship to the companies you invest in.
- We will source angel investors that have specific expertise in the areas we invest in.
Do due diligence
Develop a clear investment strategy that aligns with your financial goals, risk tolerance, and sector preferences. Determine the amount of money you are willing to invest, the types of companies you are interested in, and the stage of development you prefer.
- FundedbyAngels will provide initial due diligence on financials, team and valuation to assess the overall potential of he business.
Determine the fair value
Ensure that the valuation is reasonable and aligned with the company’s growth potential.This is hard, especially for early stage businesses that may not yet have a clear product-market fit.
- We will provide a valuation assessment on all opportunities we present.
Have an exit strategy
Understand the company’s exit strategy and the potential timeline for a return on your investment. Be prepared to hold your investment for a longer period of time and have a clear plan for exiting your investment when the time is right.
- Since we mostly invest in very early stage companies, bear in mind that the time to exit can be long and often longer than 5 years.
Legal and tax advise
Seek professional legal and tax advice to ensure that your investment is structured properly and that you are aware of any legal and tax implications of the investment.
- FundedbyAngels will handle contracts, cap tables and all other administrative work related to the investment. We often use third party platforms for this, such as Angellist, Vauban or Leva.
- Remember that investing in startups can be risky, and not all investments will result in a positive return. It's essential to do your homework, stay discipli- ned, and be prepared to learn and adjust your investment strategy as needed.
Top 3 tips
for new Angel Investors
1) Start small and learn as you go
Angel investing can be complex and risky, so it’s important to start with small investments and learn as you go. Like FundedbyAngels, invest alongside more experienced investors and venture capital firms, and take advantage of opportunities to learn from their expe- riences. Focus on building your expertise and network over time, and be prepared to adjust your investment strategy as you gain more knowledge and experience.
2 ) Diversify your portfolio
Diversification is key to managing risk in angel investing. Consider investing in a variety of companies across different industries, stages of development, and geographies. By spreading your investments across multiple companies, you can reduce the risk of losing your entire investment in a single company.
3 ) Be patient and prepared for the long haul
Angel investing is a long-term game, and it can take years before you see a return on your investment. Be patient and prepared to hold your investments for an extended time, at least five years. It’s also important to have a clear exit strategy and be prepared for the emo- tional ups and downs of angel investing, and don’t let short-term setbacks or successes distract you from your long-term goals.
Why do we love Angel investing?
We strive for impact
As angel investors we have the opportunity to support innovative ideas and technologies that have the potential to make a significant impact and affect the lives of millions of people! We make a difference in the lives of entrepreneurs and the communities in which they operate.
By providing funding and support to early-stage companies we help create jobs, spur economic growth, and drive innovation.
We look for early access and high returns
Angel investing is by nature risky as we invest in very early start ups. We eliminate some of that risk by pooling investments with other Angels and Venture capitalist firms. We have the opportunity to access investment opportunities that may not be available to the public. By investing in early-stage companies, angel investors can access a pipeline of potentially high-growth companies that may not be publicly traded.
We build networks
Potential for network and skill-building: Angel investing can also provide opportunities for angel investors to build their networks and develop new skills. By working closely with entrepreneurs, other investors, and industry experts, angel investors can gain valuable experience and knowledge that can be applied to future investments or other areas of their lives.