Challenges in Angel Investing

Angel investing can be fun and financially rewarding to the investor as well as helpful to the startup.

It can also be challenging.

Here are some challenges to consider:

Angel investing requires hands-on work with the startups not only in funding but also in supporting them after the investment.

Angels often fill in the gaps left by the local incubators and accelerator programs in coaching them into a place where they can raise funding.

First-time angels can find it time-consuming and expensive to learn the process.

New market segments require the angel investor to continually learn new industries and business models. 

There’s no collateral for the investment and it can all go to zero as it’s a risky investment class.

One out of ten investments will be a home run.  

Two or three will provide a small return on investment.

And the rest will fail. 

Angel investing can be a rewarding endeavor but it’s not without its challenges.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.

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Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

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Disclaimer:
Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.