How Can I Become An Angel Investor ?

To become an angel investor you need to have enough money to invest in business ventures and have experience that could add value to the venture you invest in.

Money

A typical angel investor in the USA invests between USD 5000 to 500,000 in growing businesses. In the UK the investment range is from UK Pounds 10,000 to 250,000.

In India, the concept of angel Investing is very new so the benchmark investment range is not established. However we feel that if you have surplus funds between USD 10,000 (Rs 4,50,000) to USD 100,000 (Rs 4.5 million) you may be able to find interesting angel investing opportunities.

Investment advisors generally recommend that angel investors put no more than five to ten percent of their total portfolio into these private equity investments. The bulk of their portfolio should remain in the core investments of stocks, bonds and cash.

Skills & Experience

You should have business and management experience and industry contacts in your area of expertise. With your business experience you are more likely to be able to make a sensible judgement about whether the company seeking money is likely to succeed. You will also be able to contribute more to the management of the company. If your business experience is limited, the most sensible option would be to seek to invest alongside people who are very experienced, in a syndicate.

Research suggests that on average an investor spends about 10 hours a week on the company's affairs. It would obviously be helpful if your skills and experience are complementary to the existing skills set in the business. If your skills fill a gap in the venture's skills set, you are less likely to be accused of  "interfering" in the affairs of the company.