An angel investment is a sort of investment in which a business angel, angel investor, or an informal investor who supplies the capital for the start up of the business within the exchange of owner equity or convertible debt. In this type of investment, the investors organize them into networks for sharing their research and in addition pool the investment capital. Within the angel investment investors, unlike venture capitalists, invest their funds while managing pooled money that other people in a managed and professional kind of fund. These types of investment bear high hazards and are also subjected to the dilution from future rounds of investment. The investors want a higher return on their investment. The early stage companies usually fail on account of the lost of large percent of the investment. There are angel investors that are professional and they seek the investment having potential to return nearly 10 times or even more than its initial investment and in the 5 years.
The term ‘angel’ that can be used within the angel investment is normally originated from the Broadway where this term was used for describing the rich persons that are known for providing the funds for the theatrical productions. The investors that invest funds in this form of investment are normally retired executives or entrepreneurs, who have many interests in investing the cash for a number of reasons. The main reason include they want to make use of these networks and experience on full time basis and in addition, they want to monitor the new generation of entrepreneurs. Angel investors not only provide the funds nonetheless they are also involved in offering the important contacts along with useful advice about management. There are lots of ways of meeting to the angel investors that typically includes the conferences and symposia held by the investors.