Angel investors are individuals who are willing to invest money in startups when no other people or group are willing to.
These angel investors get equity of the funded business or some other time the investment is seen as a convertible loan.
Money according to a popular axiom is said to make the world go round, and it is agreed that one of the best ways to make money is by investment.
This is the acquiring of an asset(s) or putting money into a business hoping for higher returns.
Investments are not done blindly if one wants to invest in assets. The individual investor first does a background mathematical check, finding out if the price of the asset will increase over time and how long it will take to do so.
An informed decision is now made, although there’s nothing with a hundred percent assurance at least it’s a calculated risk.
However, when the investment is in a business, the rate of probability is usually higher. Some investors do not invest in the business because of the rocky ground it presents.
However, business investment is a risk worth taking. As the business grows, so does your value and this most times dwarfs the original money invested over and over again.
Small and Medium Enterprises (SMEs) and startups are common business investment ventures.
Startups are more open to funding as they are yet to take off. Angel funding is often more favorable than the traditional ways of getting funds.
Also read, Angel Investors and Tech Startups
The funds from the angel investor provide startups hence enables the startup to evolve, innovate and subsequently grow.
Angel investors in Nigeria are becoming more popular than prior now. There are networks these investors belong to called Angel network so that startups can easily locate investors.
These startups present their pitch deck and an interested angel investor can single-handedly fund the startup.
There are not a lot of these Angel Investors in Nigeria. However, Lagos Angel Network is one of the most active angel networks in Nigeria and Africa.
The network was founded in the year 2014 and has funded a lot of startups in Lagos since its inception.
This Angel network in Lagos, Nigeria has the vision and mission of aiding and promoting Lagos-based startups in the country for development giving them access to business circles, mentoring and nurturing the startups thereby influencing sustainability.
There are certain things angel investors look out for before they invest in a business, these factors can now help them make informed decisions.
Remember they are businessmen and not angels, some of these things could be a well-tailored and detailed business plan.
As a startup, a business plan shows the viability of your ideas and an investor would like to see this before investing.
An angel investor will also want to know what the investment will get, equity or higher returns.
To learn how to set up binding contracts that clearly state out this information.
Consult a legal practitioner if possible, as there are also cases of investors stealing business ideas.
Angel investors are not only found in their networks, but any individual with funds can also be an angel investor for a startup.
The right pitch and business plan have the potential to fish out an angel investor.
About the author
Chibuzor Elizabeth Chijioke a graduate of Abia State University is a Nigerian-based entrepreneur and content writer. She trained as a digital marketer at Innovation Growth Hub. She is committed to teaching people how to apply technology to better their lives and businesses. She spends her leisure reading sci-fi and fantasy novels.
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