What is the benefit to me as an individual to invest in entrepreneurial ventures?
Angel investors assume the highest risk for investment, as there is no guarantee that the venture will become a viable business, and there is the chance of losing one’s entire investment. However, larger risk also translates to greater rewards. Angels historically see greater returns on their investments as compared to alternative asset categories. Statistics over a 20-year period show that seed-fund investments have an average of 22.4 percent return on their investment. Venture and hedge funds come in at 18.7 percent; NASDAQ and S&P 500 are 13.2 and 14.9 percent respectively. In addition, angels have greater latitude and control over their investments. Angel investors have the benefit of tailoring their involvement in the venture to anything from strictly seed capital to holding a position on the company’s board of directors.
