Why Do They Take The Risk ?

The most important reason the angel investors take risks is to earn higher than average return on their surplus funds. It would be simplistic to consider the quest for high returns to be the only reason for which they take risks. The other non-financial reasons include:

• Need to mentor and nurture talent.
• Need for self-actualisation and to use their creativity to solve new business challenges
• Most Angels want to get a deep sense of satisfaction from being "smart" and like to keep testing their judgement in identifying ideas or ventures which become successful. Money that they make in successful ventures makes them happy, but the fact they were smarter than others in picking a "winner' makes them happier.

Community development and sense of obligation. Most angels have been helped in their ventures by people they came in contact with. They like to give back what they received from the community by helping young entrepreneurs develop ideas which contribute in some way, to the betterment of the community of which they are a part.