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What are angel investors, where did they get this name, how do they help startups?

New Delhi. Angel investors are also called private investors, seed investors or angel funders. These are people who have a lot of property. Which are generally called High Networth Individuals. They provide financial help to small startups or entrepreneurs. In return, they take a stake in the company. Angel investors are often relatives or family members of entrepreneurs. However, this is not necessary. The growing startup culture has now made people with wealth more eager than ever to invest in good ideas. They don’t want to miss out on becoming the next Facebook or Amazon investor.

It is possible that Angel Investors provide initial and one-time investment to entrepreneurs but sometimes it continues even further. So that the company can get out of difficult times. Explain that angel investors give money to companies in the initial stages, so it can also prove to be a very risky deal. However, these are people who do not have any shortage of money and can take this risk. Angel investors are looking for such an investment option from where they can get faster and higher returns than traditional investment options.

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Where did this name come from?
Angels were those wealthy people who used to pay for theatrical productions in Broadway theatres. The term angel investor was first used by William Wetzel. He was the founder of the Center for Venture Research at the University of Hampshire. He did a study on raising funds by entrepreneurs.

From where does the money come to them?
As we told you above that usually these are very rich people. That’s why they have their own money to give. Sometimes the angel investor may be a company, trust, or investment fund rather than an individual. They are different from venture capitalists. Venture capitalists manage other people’s money in a pool and then invest it in various options.

How do we help entrepreneurs
Angel investors are usually expecting a return of 22 per cent on their investment. This can be a huge amount of return for a starting company. But the cheap ways of funding the business like banks do not give huge amount to new entrepreneurs quickly. In such a situation, only angel investors become their support. The number of angel investors has increased substantially in the last decade.

Tags: business, business news, Indian startups

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