Angel Investing
Angel Investing is a form of “seed” capital, which is money used in the early stages of a business, often before there is any meaningful revenue from paying customers. Usually angel investments are based on more than just an idea – usually a prototype of some kind exists, and there is enough of an organization in place to give the investor confidence that the business can succeed in the difficult challenge of finding “product-market fit”.
Angel Investing is a form of “seed” capital, which is money used in the early stages of a business, often before there is any meaningful revenue from paying customers. Usually angel investments are based on more than just an idea – usually a prototype of some kind exists, and there is enough of an organization in place to give the investor confidence that the business can succeed in the difficult challenge of finding “product-market fit”.
While angel investing and venture capital are related, a key difference is that angel investors are investing their own personal funds directly (either by themselves or as part of a syndicate or angel group), and directly decide which companies to fund. When a person (or institution) invests in a Venture Capital fund, they are not choosing the companies directly, rather they delegate that to the fund’s management (its General Partners).
Venture capital also typically comes into a company later on in its development (often after its already demonstrated commercial success and needs financing to fund growth), and in higher dollar amounts. While angel investments are usually around $150-$500K (often through a syndicate of 10-20 investors each contributing $10K-50K), early-stage (aka “Series A”) venture investments are more typically in the $7-$10M range (or higher).
Because angel investors are investing their own money, the amount of due diligence involved can vary quite a bit, with some angels committing based on a single meeting, or others merely following the social proof of a trusted syndicate lead. A venture capital firm, however, owes a formal fiduciary duty to its limited partners (its investors) and so will engage in a more formal due diligence process.
Want to learn more but aren’t sure where to start? You can explore 168 crowdfunding investment platforms in our database and learn more about the nuts and bolts of crowdfunding and alternative investing on our blog. Did you know you can use a self-directed retirement account to invest in many alternative investments? Rocket Dollar makes it easy, and when you sign up using that link you'll be helping to support YieldTalk.
Featured Reviews
EquityMultiple
EquityMultiple stands out among real estate crowdfunding investment platforms because their main investors and senior leadership come from institutional real estate finance, rather than being VC-funded. Seed funding for the company was provided by Mission Capital (later acquired by Marcus & Millichap) and their co-founders and board of advisors come from the New York real estate finance and law community. They offer fewer investments than some other platforms, but that’s a deliberate choice to take a more curatorial approach to dealflow. Overall, EquityMultiple is a solid choice for accredited investors looking for a hands-off way to invest in commercial real estate.
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First National Realty Partners
First National Realty Partners (FNRP) is a commercial real estate private equity firm that focuses on grocery-anchored commercial shopping centers, offering both investments in individual properties and an Opportunity Fund across all of their offerings.
"First National Realty Partners (FNRP) is a rapidly growing commercial real estate private equity firm that owns and operates real estate throughout the United States. FNRP focuses on expanding its portfolio by acquiring market-dominant, well-located commercial assets well below replacement cost. "
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Percent
Percent aggregates private-credit investments from a range of originators offering small-business, crypto, venture loans, litigation finance and more, including international debt investments. Low minimums.
"Percent unlocks exclusive private credit investments for your portfolio. Access select alternative investments on the platform powering the future of private markets."
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