How to Start Angel Investment: Unveiling the Path to Becoming an Angel Investor

Most of you would have at least heard of Shark Tank India, many of you might have become regular watchers of the reality show as well. On the one hand, entrepreneurs looking for Angel Investors for startups & on the other hand, Angel Investors are looking for profitable ventures that can help generate exponential returns. Although the concept of Angel Investing is at least 45 years old, for our parents & grand parents' generation angel investing is a relatively newer concept & shows like Shark Tank are doing a fabulous job in promoting this concept. Angel investing has emerged as a dynamic and rewarding form of early-stage investment, enabling entrepreneurs and startups to access vital capital while offering investors the opportunity to support innovative ideas and potentially earn substantial returns.

Angel investing is the realm where visionary entrepreneurs become the driving force behind startups and offers a unique blend of excitement, potential returns, and a chance to shape the future. This comprehensive article serves as your guide, unraveling the intricacies of starting your journey in angel investing. From understanding the mechanics to exploring the remarkable benefits, let's dive into the world of angel investing and discover how you can become a crucial part of innovation and growth.

Understanding Angel Investment: Angel investment refers to the act of startup investing in which Angel Investors provide financial backing to startups and small businesses in exchange for equity ownership. Angel investors, also known as "angels," typically invest their own capital in early-stage companies, aiming to assist them in reaching their growth potential. Capital invested by Angels is also known as Angel Capital. Unlike venture capital firms, angel investors are often individuals with high net worth or successful entrepreneurs who leverage their experience, expertise, and networks to nurture the startups they invest in.

How Angel Investment Works:

a. Identifying Opportunities: The first step in angel investing is to identify promising startup opportunities. This involves networking with fellow investors, attending pitch events, and exploring crowdfunding platforms or angel investor networks to discover potential investment prospects.

b. Due Diligence: Once you have identified a startup of interest, conducting due diligence is crucial. Assess the startup's business plan, market potential, competitive landscape, and the capabilities of the founding team. Engaging in thorough research helps you make informed investment decisions.

c. Negotiating Terms: After completing due diligence and expressing your interest in investing, negotiations take place regarding the terms of the investment. This includes determining the equity stake, valuation, investment amount, and additional provisions, such as board representation.

d. Funding the Startup: Upon agreeing on investment terms, you provide the startup with the capital needed to fuel its growth and development. Angel investors may also offer mentorship, strategic advice, and valuable connections to help the startup thrive.

e. Active Involvement: Unlike traditional investors, angel investors often play a hands-on role in guiding and mentoring the startup. Their experience and industry knowledge can be invaluable to the startup's success.

Let’s now take a look at some data to understand how has Angel Investment ecosystem performed off late:

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We should also explore the top Indian Angel Investors & their funded startups & how are they performing right now:

Angel Investor	Startup Name	Valuation on 1st Funding	Multiple	Current Valuation
Shilpa Shetty	Mamaearth	15 Mn$ (2017)	193%	US$ 3 Bn
Sanjeev Bikhchandani	Zomato	5.5 Mn$ (2010)	2150%	US$ 9.76 Bn
Anupam Mittal	Ola	5 Mn$ (2011)	824%	US$ 3.5 Bn

This implies that if each of the above 3 listed Angel Investors would have invested even Rs.1 Lakh each during the early stage of these respective startups, their present investment would have been worth around Rs. 19 cr., Rs. 82 Cr. & Rs. 215 cr. respectively.

I am certain that after looking at the above figures, you must be thinking about what more benefits can Angel Investing offer to offset the high risks involved. Not to worry we have already prepared a list for all of you.

Benefits of Angel Investing:

a. Potential High Returns: Angel investing offers the potential for substantial returns on investment if the startup experiences significant growth and achieves success. While the risks are high, so are the potential rewards.


b. Early Access to Innovation: Angel investors get a unique opportunity to be at the forefront of innovation, supporting groundbreaking ideas and technologies that can disrupt industries and shape the future.

c. Diversification: By creating a portfolio of investments across various startups, angel investors can spread their risk and mitigate losses in case one investment does not perform as expected.

d. Personal Fulfillment: Angel investors experience the fulfillment of helping entrepreneurs realize their dreams and create innovative solutions to real-world problems.

Finally, let’s come to the most important question: Why Planify? Afterall there are many Investment platforms available so what does Planify offer to you as investors? We would like to list a few exclusive benefits that you would enjoy on investing through Planify:

Benefits of Angel Investing through Planify:

a. Early Access to High potential startups: Investors have an excellent chance to gain exponential returns by investing in Planify-backed startups that have a cumulative valuation of over ₹1600 Cr. Planify has over 250 Pre-IPO, Startups, Unicorns & SMEs on its platform.

b. Save on Charges: Investors can save on transaction charges if they route their investments through Planify. Planigfy charges 0% commission & transaction charges on direct investment into startups.

c. Get Name on Cap. table: Angel Investors have a chance to get their names on the Cap. table of startups in which they invest.

d. Delivery in Demat Account: Planify facilitates express delivery of shares in dematerialized form to angel investor’s demat account on the same day the transaction is made.

Angel investing presents a compelling avenue for individuals with a passion for entrepreneurship and a desire to contribute to the growth of innovative startups. By understanding the mechanics of angel investment, conducting thorough due diligence, and actively engaging with the startups they support, angel investors can foster a mutually beneficial relationship that propels promising entrepreneurs toward success. While the journey might involve risks, the rewards of angel investing extend far beyond financial gains, offering the satisfaction of fostering innovation and playing a pivotal role in shaping the future of businesses and industries alike.