Angel Investing: a Case Study of Indian Angel Network

These entrepreneurs start a company knowing from day one that their vision could change the world. They attract investment from equally crazy financial investors – venture capitalists. They hire the best and the brightest. Their job is to search for a repeatable and scalable business model.  When they find it, their focus on scale requires even more venture capital to fuel rapid expansion. Steve Blank acknowledged that scalable startups in innovation clusters (Silicon Valley, Shanghai, New York, Bangalore, Israel, etc.) make up a small percentage of entrepreneurs and startups but because of the outsize returns, attract almost all the risk capital.

Walnut Venture Associates are a group of angel investors. In 1997 the club had around a dozen individual investors, forming an “angel group”. Their primary targets are investments ranging from $250,000 to $1,000,000. This is due to the gap of capital funds initiated by the VC’s from not considering investments bellow $1 million. Also, angel investors can acquire significant equity at low cost, and help the growth of the company with their knowledge and expertise. By selecting only the most exceptional people and ideas, investments in startups can lead to massive returns on relatively small investments. As unexperienced entrepreneurs, they are a key resource to have in order to achieve quick growth, and secure the company’s early stages.

Business angels usually invest in companies around their home so they can check up on their investments.

Traditionally, one of the most difficult part for an entrepreneur to turn their idea into reality is raising capital. However, with the recent technology boom and a society that gets euphoric from new ideas, entrepreneurs now have a plethora of new ways to get their company funded, with crowdfunding as the most recent new way of raising capital.

venture capital financing. These seed funds can provide this kind of capital, as can “angel” investors

Before now, only entrepreneurs in a few select areas with the right connections could be funded, and only then if their vision matched a VC or Angel Investors criteria or schedule. Consequently, only a few thousand VCs in the world could decide which entrepreneurial

Angel Investors: An angel investors are group of people who has high net worth and lend the funds to the company in exchange for ownership stake in company. Angel investors first scan the the growth of the business present as well as the future projection before lending the funds. Sometimes angel investors lend money on collateral

Angel Investors - The main business angels vary from venture capitalists in their motives and level of involvement. Often angels are more involved in the business, providing ongoing mentorship and advice based on experience in a particular industry. For that reason, matching angels and owners is critical. There are substantial easily locatable networks of angels. Pitching to them is no less demanding than to a venture capitalist as they still review hundreds of proposals and accept only a handful. Often the demands around exit strategies are different for an angel and they are satisfied with a slightly longer term investment (say 5-7 years compared to 3-4 for a venture capitalist).

Burrill, G. Steven, and Craig T. Norback. The Arthur Young Guide to Raising Venture Capital.

My experiences at the Demo Day solidified my fascination in the ecosystem of startups and venture capital. Unlike software where objects are definite and fulfill specific conditions, entrepreneurship represents an exciting uncertainty where success can be defined in myriad ways. However, due to the inherently uncertain nature of startups, a recurring theme among the startups I met was the need for funding to convert their dreams into realities. As the Demo Day ended, I determined that although creating a startup would be exhilarating, I want to become a venture capital investor. I decided that these innovators shouldn’t have to be concerned with funding and that becoming a venture capital investor would allow me to remove their limitations and join them on their paths to success.

The Avani Angel Group, LLC is a collective of experienced angel investors seeking to make the world a better place through the advancement of social enterprise and entrepreneurial success. The group primarily invests in early-stage, future high growth startups with innovative yet profitable solutions to social and environmental issues. AAG seeks to drive entrepreneurial success through the creation of synergistic relationships between our investors and our investees. Such relationships are facilitated by high levels of coachability, mentorship, and the cohesion of common goals. The group is entirely member managed and ran by an executive board. Membership to AAG LLC. is extended

To figure that out, I looked at data produced by the Center for Venture Research at the University of New Hampshire, which provides annual estimates of the number of angel investors, the amount of money invested by angels, and the number of companies receiving angel financing.

However, this study would consider financing from angel investors is more feasible and attractive for Purinex based on the analysis of decision tree. The decision tree shows the fact that VC firms would require 40 percent of the equity in Purinex, resulting in the situation of having less EV. Perhaps the most important factor is that there is a very strong chance—a 98.75% possibility (100% - [25% * 5%])—that a partnership deal will come through during the following two years, and thereby raising $2 million form angel investors is quite enough for Purinex to secure the partnership deal.

Angel investors are those investors that are particularly interested in investing in companies early stage companies. Their investment capital is generally limited and if relevant, it has been advantageous for them to pool their funds as a group to not only participate in larger deals but also to diversify risk. They invest in exchange for ownership equity or convertible debt.

financial help from the general public (the “crowd”) instead of approaching financial investors such as business angels, banks or venture capital funds. This technique, called “crowdfunding”.