1.
Generate Return on Investment
Studies have consistently found that angel investing returns compare favorably to those of formal venture capital investors. A 2016 study by the Angel Resource Institute reported that the overall return on angel exits is 2.5 times the money in 4.5 years, or about 22% gross internal rate of return.
2.
Diversify Your Portfolio
Allocating a percentage of your overall portfolio into angel investments can increase returns while lowering volatility. A SharesPost whitepaper on alternative asset investment strategies concluded that allocating 5% to private growth companies could increase the returns of a traditional portfolio by 12%.
3.
Meet Interesting People
You are guaranteed to meet entrepreneurs with fascinating ideas and tremendous passion. If you choose to participate in an angel group, you will also build great bonds with other investors. Angel groups foster a spirit of teamwork and mutual trust, leading to long-lasting, true friendships.
4.
Support What You Care About
Put your money into the kinds of businesses that are most important to you. This might be industry sectors you have experience in, entrepreneurs who are alumni of your university, or a particular demographic group (e.g. female entrepreneurs) or cause that you care about.
5.
Help Power Innovation
Startup investing gives you the opportunity to invest in innovation. Every year, angel investments help create revolutionary and life-changing technologies. Many of the biggest names in the tech world got an early boost from angel investors, including Facebook, Google, Amazon and Uber.
6.
Feel Ownership in What You Invest In
Angels are usually active, hands-on investors who know the entrepreneurs they invest in on a personal level. By sharing your knowledge, experience and connections, you get to help budding entrepreneurs grow their businesses while improving your odds of a successful investment.
7.
Know You’re Doing Good
Nearly 264,000 jobs were created in the United States last year by angel-funded companies, according to a recent report by the Center for Venture Research. As a PHX East Valley angel investor, you can take pride in supporting tech companies that create local jobs and enhance quality of life throughout our region.
8.
Entrepreneurship is Exciting
By becoming an angel investor, you will give promising PHX East Valley startups a greater chance at success. Experience the excitement of watching the local startups you invest in grow to create new jobs and technologies without the responsibility of having to lead the company.
9.
Learn New Skills
Angel investing offers something new for everyone. Learn deal terms, the most effective ways to mentor entrepreneurs, how to be a good board director and other valuable skills. In addition to making you a more capable investor, learning these skills may help you in your own professional growth.
10.
Apply Your Current Skills in New Ways
Your unique background and expertise may be just what your angel group needs to evaluate its next investment opportunity. Staying connected to entrepreneurs after you invest also offers both emotional and financial rewards. Angels who mentor and coach entrepreneurs report significantly higher overall ROI.
